Who Really Needs To Trade Currencies?

Some people have a concrete need to try and lock in the future value of currency. Example — a Mexican oil company will be buying drilling rigs in the Netherlands next year. They need to be sure that the Pesos they are setting aside today to make that purchase won't drop in value when it's time to pay for the drilling rigs in Euros. The Peso goes up and down, often more down than up, so they need to hedge against that risk.

How can you hedge against the risk of your currency losing value? You can buy a currency future from the Philadelphia Stock Exchange. Or, you can deposit money in a bank like Everbank that will enable you to deposit the funds today in a foreign currency at the current exchange rate. That way, you lock in today's rate, effectively.