A:

Yes, you can create a daily price chart of different currencies going back many years. Price charts can be found on the internet for free or by subscription to services that offer such data. For example, the Yahoo! Finance Currency Converter is a free online service that offers up to five years of currency pricing information.

In order to go back more than five years, you would have to find a data service that retains such records. For example, some companies have data going back 20 or 30 years. The ability to go back in time to compare currency valuations of the past with those of today provides a perspective on the buying power of the currencies in question. For example, the South African rand was stronger than the U.S. dollar in 1975. In those days, one South African rand equaled $1.30. By contrast, in 2008, one rand can only buy $0.14. The devaluation of the rand occurred as a result of a decline in South African productivity and the associated inflation that decreased the country's buying power.

(For more on this topic, see Forces Behind Exchange Rates.)

This question was answered by Selwyn Gishen.

RELATED FAQS
  1. How does the balance of trade impact currency exchange rates?

    Find out how the balance of trade affects a country's exchange rates and how those exchange rates can, in turn, affect the ... Read Answer >>
  2. Why do forex traders use a currency converter?

    All currencies are quoted in pairs - one country's currency against another country's currency. A currency converter is used ... Read Answer >>
  3. What is a currency converter and how do I use one?

    A currency converter is a calculator that converts the value or quantity of one currency into the relative values or quantities ... Read Answer >>
  4. What are key economic factors that can cause currency depreciation in a country?

    Read about the causes of currency devaluation, and find out how to differentiate between relative and absolute currency devaluation. Read Answer >>
  5. What is the value of one pip and why are they different between currency pairs?

    In forex markets, currency trading is done on some of the world's most powerful currencies. The major currencies traded are ... Read Answer >>
  6. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
Related Articles
  1. Trading

    The New World Of Emerging Market Currencies

    Take advantage of foreign currency markets without stepping out of your house.
  2. Investing

    Currency Positions You Can Take Now

    The foreign currency market is the largest financial market in the world, and investors in this market have many options.
  3. Trading

    What Happens in a Currency Crisis?

    A currency crisis comes from a decline in the value of a country’s currency.
  4. Trading

    The Effects Of Currency Fluctuations On The Economy

    Currency fluctuations are a natural outcome of the floating exchange rate system that is the norm for most major economies. The exchange rate of one currency versus the other is influenced by ...
  5. Trading

    Top 5 Reasons To Invest In Currencies

    Here's why you should get into the forex market.
  6. Trading

    Here's How You Calculate An Exchange Rate

    Struggling to get a grasp on exchange rates? Here's what you need to know.
  7. Investing

    Profit From Forex With Currency ETFs

    There's always a bull market somewhere - and now you can find it with currency ETFs.
  8. Trading

    Top 5 Hardest-Hit Currencies

    The value of a country's currency is dependent on many factors that will cause it to fluctuate, relative to other world currencies.
  9. Personal Finance

    5 Countries Where the USD Is Commonly Accepted

    In these five countries, the U.S. dollar is either the official currency or is used alongside native currencies for transactions.
RELATED TERMS
  1. ZAR (South African Rand)

    The currency abbreviation for the South African rand (ZAR), the ...
  2. Universal Currency Converter

    A program that allows for the quick conversion of currencies ...
  3. International Currency Converter

    An electronic program that allows for the quick conversion of ...
  4. Currency History

    The historical values of a base currency in relation to the values ...
  5. Currency

    Currency is a generally accepted form of money, including coins ...
  6. Currency Pair

    The quotation and pricing structure of the currencies traded ...
Hot Definitions
  1. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  2. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  3. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  4. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  5. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
  6. Redlining

    The unethical practice whereby financial institutions make it extremely difficult or impossible for residents of poor inner-city ...
Trading Center