Dictionary/Exchange Rate

Exchange Rate

Economics
Definition

An exchange rate is the price at which one currency can be exchanged for another. Exchange rates fluctuate continuously based on supply and demand, interest rate differentials, economic data, and geopolitical events. They are the core pricing mechanism of the forex market.

Example in context

If the exchange rate of GBP/USD is 1.27, you would receive $1.27 for every £1 you exchange.

Related terms

USD (US Dollar)Forex
PipForex
SpreadForex

More Economics terms

Gross Domestic Product (GDP)InflationQuantitative Easing
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