Historically, currency markets have been extremely volatile and unpredictable, and in periods of high volatility, currency fluctuations are especially profound with one currency rising or falling by as much as 10 percent or more against another.
A currency pair consists of the two currencies that make up a foreign exchange rate. Historical foreign exchange rate fluctuations is the difference between the highest and lowest quote of a specific currency pair in the past 12 months, expressed as a percentage.
Let's look at an example:
- A company is trading EUR/USD.
- The highest quote for the rate was 1.10 during the last 12 months.
- The lowest quote for the rate was 1.00 during the same 12 months.
- This means that the historical fluctuation for EUR/USD would have been 10%.