Exchange Rates
Exchange rates are the rate at which one currency can be exchanged for another. Exchange rates are determined in the foreign exchange market, which is open to a wide range of different types of buyers and sellers, and where currency trading is continuous: 24 hours a day except weekends, i.e. trading from 22:00 GMT on Sunday until 22:00 GMT Friday. The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.
History of Exchange Rates
The history of exchange rates can be traced back to the gold standard, which was used as a basis for the value of currencies in the 19th century. The gold standard was abandoned in the early 20th century, and since then, exchange rates have been determined by the forces of supply and demand in the foreign exchange market. Exchange rates have fluctuated widely since then, and have been affected by a variety of economic, political, and social factors.
Comparison of Exchange Rates
| Currency | Exchange Rate |
|---|---|
| US Dollar | 1.00 |
| Euro | 0.90 |
| British Pound | 0.80 |
| Japanese Yen | 110.00 |
Summary
Exchange rates are the rate at which one currency can be exchanged for another. Exchange rates are determined in the foreign exchange market, and have been affected by a variety of economic, political, and social factors. For more information about exchange rates, you can visit websites such as the International Monetary Fund, the World Bank, and the Bank for International Settlements.
See Also
- Currency
- Foreign Exchange Market
- Interest Rates
- Balance of Payments
- International Monetary Fund
- World Bank
- Bank for International Settlements
- Money Supply
- Inflation
- Gross Domestic Product
