Earth's core and the geodynamo

Earth's magnetic field (also known as the geomagnetic field) is the magnetic field that extends from the Earth's inner core to where it meets the solar wind, a stream of energetic particles emanating from the Sun. Its magnitude at the Earth's surface ranges from 0.25 to 0.65 Gauss. It is approximately the field of a magnetic dipole tilted at an angle of 11 degrees with respect to the rotational axis—as if there were a bar magnet placed at that angle at the center of the Earth. However, unlike the field of a bar magnet, Earth's field changes over time because it is generated by the motion of molten iron alloys in the Earth's outer core (the geodynamo)

The Earth's magnetic field is mostly caused by electric currents in the liquid outer core, which is composed of highly conductive molten iron. A magnetic field is generated by a feedback loop: current loops generate magnetic fields (Ampère's circuital law); a changing magnetic field generates an electric field (Faraday's law); and the electric and magnetic fields exert a force on the charges that are flowing in currents

The motion of the fluid is sustained by convection, motion driven by buoyancy. The temperature increases towards the center of the Earth, and the higher temperature of the fluid lower down makes it buoyant. This buoyancy is enhanced by chemical separation: As the core cools, some of the molten iron solidifies and is plated to the inner core. In the process, lighter elements are left behind in the fluid, making it lighter. This is called compositional convection. A Coriolis effect, caused by the overall planetary rotation, tends to organize the flow into rolls aligned along the north-south polar axis.

http://en.wikipedia.org/wiki/Earth's_magnetic_field
http://en.wikipedia.org/wiki/Earth's_magnetic_field#Earth.27s_core_and_the_geodynamo