Exchange Rate Volatility

Exchange rate volatility refers to the frequent and unpredictable changes in the value of one country's currency relative to another. These fluctuations can happen due to various factors, such as economic news, political events, or market speculation. High volatility means the currency's value can shift significantly in a short time, affecting international trade, investments, and travel costs. Stable exchange rates are generally easier for businesses and individuals to plan around, while volatile rates add an element of uncertainty that can increase financial risk and costs.