According to InvestorGuide.com, the foreign currency exchange market fluctuates constantly. The impact of political or economic instability on a currency can lead to more dramatic fluctuations in the market. Investor behavior is another influence that can cause profound fluctuation.
Most currencies have value based on a floating exchange rate, with a few currencies like the US dollar and the Japanese yen acting as world reserves. This is a consequence of political and economic stability and power in those countries. Important events such as war, terrorism, and economic dislocation, however, can shake the value even of world reserve currencies, notes InvestorGuide.com.
The FOREX market operates 24 hours a day, five days a week, with more than a trillion dollars exchanged daily says InvestorGuide.com.