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A change in an exchange rate. If the British pound is worth $2 on Monday, and $1.80 on Tuesday, a (somewhat dramatic) currency fluctuation has occurred. Currency fluctuations happen constantly and occur for all floating currencies.

For example, if demand for a particular currency is high because investors want to invest in that country's stock market or buy exports, the price of its currency will increase. Just the opposite will happen if that country suffers an economic slowdown, or investors lose confidence in its markets.

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