A beta currency is a currency considered more volatile and higher-risk compared to traditional major currencies like the US dollar or Swiss franc. These currencies tend to perform well during risk-on environments when investors seek higher returns, and decline during risk-off periods when capital flows to safe havens. Examples include the Australian dollar, New Zealand dollar, and many emerging market currencies that are closely tied to commodity prices and global growth sentiment.
Example
“The Australian dollar, a classic beta currency, rallied sharply as risk appetite returned to global markets following positive trade deal news.”