The VIX measures the market's expectation of how much the S&P 500 will swing over the next 30 days, derived from options pricing. It tends to sit low when markets are calm and confident, and spikes sharply when fear or uncertainty rises — which is why it's nicknamed the "fear gauge."
For currencies, VIX matters because it's one of the cleanest proxies for broad risk appetite. A rising VIX tends to support traditional safe-haven currencies (the US dollar, Japanese yen, Swiss franc) and weigh on growth-sensitive, higher-yielding currencies (Australian dollar, New Zealand dollar) — regardless of what's happening in any single country's own data that day.