Foreign currency prices market, as any market is affected by international operations flows and investments.
Also, even if not as much, foreign currency markets are affected by economic and politic conditions, specially interest rates, inflation and politic instability.
Foreign currency markets, for example forex, have a support against these side effects that are from this market. Through investment diversification, this foreign currency market allows you to protect yourself from opposite moves.
Another option that is offered at foreign currency market is operate with future foreign currency, what does it mean?. It consists on hiring for a future date an exchange rate of a currency against the other for a certain term. Once this term is over, and the sold or purchase is not done, it is not necessary to pay the capital, and the settlement is done by difference, comparing the initial exchange rate with the one at the end of the arrangement.
This is one of the options that makes a difference between foreign currency market and stock-market.This last one is normally more volatile and its reactions are related to what happens in the economy and politics, any decision taken in this issue can have a strong impact on the share quotations.
Foreign currency markets are regulated basically by the supply and demand laws, and economic and politic factors are not a basic factor for the foreign currency.