^ comes from typewriters, where it was used to type letters like â by backing the caret and typing over the last letter. Similarly ' could be used for acute accent - hence why it didn't get a separate letter - and ` for grave accent.
By the way, the accents can often be used to force the right pronunciation of a foreign name on native speakers (at least in US, where Spanish names are so widespread). So e.g. use "á" if you want it to be pronounced [a] etc.