Does a currency not become liquid or volatile?

[xxfunguyxx]

I just have a question. I know there several currencies that are more liquid and volatile than others...will this ever change? if so how likely? and how do we know when it will. thanks

[rhodytrader]

Originally Posted by xxfunguyxx

I just have a question. I know there several currencies that are more liquid and volatile than others...will this ever change? if so how likely? and how do we know when it will. thanks

I think you might be mixing opposing ideas here.

Liquidity is the ease at which one can enter and exit positions.

Volatility is the speed and amount of price change that takes place - roughly speaking.

Illiquid currencies tend to be more volatile than liquid ones because they tend to be more suseptible to large reactions to news and events.

As to what changes liquidity, it's a question of interest among traders and fundamental reasons for trading volume. The major currencies are the majors because they represent the currencies through which the largest amount of international trade and financial exchange take place (as well as being viewed as fiscally stable). As other countries grow and develop, they could join the ranks of the majors.