Why do exchange rates fluctuate?
One of the most important things to keep in mind when converting currencies is the fact that the exchange rates fluctuate daily. So even if 10 Australian Dollars is worth 9 US Dollars today, it might be worth only 8 US Dollars next month. Exchange rates fluctuate due to changes in demand and supply of the currencies. For instance, if the Australian government sets a very high interest rate compared with the rest of the world, then foreign savers would wish to save their money in Australian dollars. So, the value of the Australian dollar would rise compared to other currencies. When exchanging a currency, it is important to understand how the rates are presented and what they mean.
