Volatility of Exchange rates
The exchange rate's volatility indicates the extent to which the currency varies over the period. The bigger the degree of currency change, the greater is the exchange rate's volatility. The fixed forex rate does not have any volatility as it remains fixed throughout. A floating rate may sometimes be volatile or sometimes may not; it relies on the exchange rate's change. The exchange rate's volatility forms the global trade and speculations a difficult task as it increases the risk of exchange rate.