International Currency Exchange Rate

AAA

DEFINITION of 'International Currency Exchange Rate'

The rate at which two currencies in the market can be exchanged. International currency exchange rates display how much of one unit of a currency can be exchanged for another currency. Currency exchange rates can be floating, in which case they change continually based on a multitude of factors. Alternatively, the exchange rates of some foreign currencies are pegged, or fixed, to other currencies, in which case they move in tandem with the currencies to which they are pegged.

INVESTOPEDIA EXPLAINS 'International Currency Exchange Rate'

International currency exchange rates are important in today's global economy. Knowing the value of your home currency in relation to different foreign currencies helps investors to analyze investments priced in foreign dollars.

For example, for a U.S. investor, knowing the dollar to euro exchange rate is valuable when choosing European investments. A declining U.S. dollar could increase the value of foreign investments, just as an increasing U.S. dollar value could hurt the value of foreign investments.

RELATED TERMS
  1. Currency Exchange

    A business that allows customers to exchange one currency for ...
  2. Foreign Exchange

    The exchange of one currency for another, or the conversion of ...
  3. Authorized Forex Dealer

    Any type of financial institution that has received authorization ...
  4. Cable

    Slang used among forex traders referring to the exchange rate ...
  5. Forex - FX

    The market in which currencies are traded. The forex market is ...
  6. Interbank Market

    The financial system and trading of currencies among banks and ...
RELATED FAQS
  1. How does the balance of trade impact currency exchange rates?

    The balance of trade influences currency exchange rates through its effect on the supply and demand for foreign exchange. ... Read Full Answer >>
  2. What is the difference between trading currency futures and spot FX?

    The forex market is a very large market with many different features, advantages and pitfalls. Forex investors may engage ... Read Full Answer >>
  3. How many types of markets can an investor choose from?

    There are a wide variety of markets in which one can invest money. The main markets are stocks (equity), bonds, forex, derivatives ... Read Full Answer >>
  4. What does rollover mean in the context of the forex market?

    In the forex (FX) market, rollover is the process of extending the settlement date of an open position. In most currency ... Read Full Answer >>
  5. What is the difference between a bill of exchange and a promissory note?

    A bill of exchange is a written agreement between two parties – the buyer and the seller – used primarily in international ... Read Full Answer >>
  6. What is the purpose of the International Monetary Fund?

    The stated goals of the International Monetary Fund include offering policy advice to member governments and central banks; ... Read Full Answer >>
Related Articles
  1. Forex Education

    The Fundamentals Of Forex Fundamentals

    Charting is not the only way to analyze the foreign-exchange market. Learn how to apply fundamental analysis to the economic indicators.
  2. Options & Futures

    A Primer On The Forex Market

    Moving from equities to currencies requires you to adjust how you interpret quotes, margin, spreads and rollovers.
  3. Forex Education

    Getting Started In Foreign Exchange Futures

    Learn how these futures are used for hedging and speculating, and how they are different from traditional futures.
  4. Forex Education

    Commodity Prices And Currency Movements

    Find out which currencies are most affected by fluctuations in gold and oil prices, and improve your trading.
  5. Forex Education

    Top 7 Questions About Currency Trading Answered

    Whether you're puzzled by pips or curious about carry trades, your queries are answered here.
  6. Forex Education

    Why Interest Rates Matter For Forex Traders

    Central banks' rate changes are one of the biggest influences on the forex market.
  7. Forex Education

    How Inflation-Fighting Techniques Affect The Currency Market

    Central banks use these strategies to calm inflation, but they can also provide longer-term clues for forex traders.
  8. Options & Futures

    Getting Started In Forex

    Before entering this market, you should define what you need from your broker and from your strategy.
  9. Investing News

    Cost-Free Connection Of Target Groups To Marketers

    ZipDial spotted a niche marketing opportunity in the area of “missed calls” and developed a business around it. Here is how ZipDial works and its benefits.
  10. Investing News

    The Funds Keep Flowing Into Indian Tech Startups

    Investors are increasingly turning their attention to Indian tech startup companies. Billions of dollars are flowing into the startup sector in India.

You May Also Like

Hot Definitions
  1. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  2. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  3. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
  4. Adverse Selection

    1. The tendency of those in dangerous jobs or high risk lifestyles to get life insurance. 2. A situation where sellers have ...
  5. Wash Trading

    The process of buying shares of a company through one broker while selling shares through a different broker. Wash trading ...
Trading Center