What Is Currency History?
Forex traders use these historical currency exchange rates to get a handle on how a currency pair has traded in the past in relation to current trends. A sound interpretation of this historical relation can help predict future price movement for these currencies.
- Currency history refers to historical exchange rate data between currency pairs.
- Forex traders utilize currency histories in the process of technical analysis and FX charting in order to make better-informed trades.
- Many online forex brokers offer currency histories to users, but there are several other official resources for finding exchange rate data going back decades.
Understanding Currency History
Currency history data for exchange rates is quite valuable to forex traders as well as to multinational companies that conduct business overseas and need to convert one currency into another. The ability to know what rates are today, compared to currency exchange rates of the past, is a valuable planning and trading tool.
There are many retail forex brokers that provide this information for free. Others sometimes charge a nominal fee for this data. It's important to do your own research before deciding where to get your historical currency exchange rate data.
One reason that historical price information is crucial is because of the number of technical analysts who trade in forex markets. This style of trading looks at past performance to identify patterns and other trading signals that can signify trends, reversals, and support or resistance levels in the market. These data can be incorporated into forex forecasting software packages to help FX traders with trading analysis via technical charts and indicators.
Getting Information on Currency History
Most online currency brokers and trading platforms will offer some degree of price histories, but these may be incomplete or may not go back far enough in time for your purposes. Other information can be gleaned from retail forex brokers, but these may charge a fee for the data.
While most people may know the Internal Revenue Service (IRS) as the organization to which you pay your taxes, it is also a place investors and travelers can gain insights into currency history data. The IRS publishes tables of information on yearly average currency rates, with simple instructions: "To convert from foreign currency to U.S. dollars, divide the foreign currency amount by the applicable yearly average exchange rate."
Here are some other places to look for currency histories:
- The International Monetary Fund (IMF) also offers troves of historical currency data, along with an exchange rate query tool, to help with research into past relationships and trends.
- Bloomberg has several resources to help track currencies, analyze the historical relationship between them, and evaluate their potential future values.
- The OANDA Historical Currency Converter offers access to 25 years of historical exchange rates for over 38,000 currency pairs, and the ability to download the data into a useful format for "spot checking, analysis, and reporting."
- The University of Maine compiles an array of additional sources that could be accessed for historical foreign exchange rate data.
- The central bank or other monetary authority of each country is crucial for finding historical foreign exchange information. A list of central banks can be found through the Bank for International Settlements (BIS). These banks often maintain official records of exchange rates.