How Often Do Exchange Rates Fluctuate?

Exchange rates float freely against one another, meaning that their values fluctuate constantly in the foreign exchange market, called the forex or the FX for short. Currency demand is driven by many factors including foreign trade, tourism, speculation, and the perception of the nation's geo-political risks. When a company in Japan sells products to a company in the U.S. the U.S.-based company needs to convert dollars into Japanese yen to pay for the goods.