Exchange Rate
The price of one country's currency expressed in another country's currency. In other words, the rate at which one currency can be exchanged for another. For example, the higher the exchange rate for one euro in terms of one yen, the lower the relative value of the yen. Investopedia Says:
In most financial papers, currencies are expressed in terms of U.S. dollars, while the dollar is commonly compared to the Japanese yen, the British pound and the euro. As of the beginning of 2006, the exchange rate of one U.S. dollar for one euro was about 0.84, which means that one dollar can be exchanged for 0.84 euros. Related Terms:
Arbitrage
Basis Point
Big Mac PPP
Currency Forward
Nominal Effective Exchange Rate - NEER
Real Effective Exchange Rate - REER
Revaluation Rates
Transaction Exposure
Translation Exposure
Uncovered Interest Rate Parity - UIP |