Historical Currency Exchange Rates

When we vacay outside of our home country, probably one of the first things we consider doing when we first step off the plane (other than finding our luggage) is exchanging currency: swapping out some US dollars for whatever the local currency is. If we’re smart about it, we’ve probably even done a little research beforehand so we know roughly what that conversion rate is going to be.

For foreign currency traders, though (called “forex traders” by the cool kids), just knowing what today’s conversion rate is...doesn’t really give them enough information. Since their whole deal is that they’re trying to make money buying and selling foreign currency, they also want to know how two currencies (called a currency pair) have exchanged in the past. Which is why they look at historical currency exchange rates; this information shows them, as the super-descriptive name implies, how currency pairs (i.e. the U.S. dollar and the Argentine peso) have exchanged over a certain period of time, be it five years, ten years, or just a few months.

Knowing this can help forex fans identify trends that might help them make more lucrative trades.