Soft Currency

A currency with a value that fluctuates as a result of the country's political or economic uncertainty. As a result of the of this currency's instability, foreign exchange dealers tend to avoid it.


Also known as a "weak currency".




|||Currencies from most developing countries are considered to be soft currencies. Often, governments from these developing countries will set unrealistically high exchange rates, pegging their currencies to a currency such as the U.S. dollar.