Use this form to dynamically generate charts that compares the currencies of your
Simply select a primary currency and a second currency to chart it against. Lastly
choose the number of days to show in your chart. Charts and calculated foreign
exchange rates are based on our daily currency updates.
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Why do Currencies Fluctuate?
Since many currencies are floating, or publicly traded, their value is subject to
fluctuations in comparison to other world currencies. Higher interest rates can
cause increased demand for a country's investments and currency. Lower interest
rates can have the opposite effect. The status of international and domestic trade
play a role. As can economic policies, resource and commodity prices. Market
psychology plays a role, especially in the short term. Much like the equity markets,
Forex markets can be volatile and unpredictable animals.
What is Currency Hedging?
Many businesses, individuals and institutions minimize the effect of volatile
exchange rates by hedging. Hedging is the practice of offsetting risk, often by
purchasing one position to protect another position. For example, a company
transacting business in both Euros and US Dollars may invest in both currencies to
offset fluctuations in either direction. As another example, many investors
recommend gold as an investment to protect against a falling US dollar. Recent gold
prices are a testament to the popularity of this strategy.
While many currencies are allowed to "float" on the FOREX market, central banks often intervene to prevent destabilization of currencies or manipulate currency values to stimulate trade.