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FX Exchange Rate

Welcome to FX Exchange Rate — this is a free and useful website devoted to share live foreign exchange rates prices and charts. It provides currency conversion widgets including currency conversion calculator and exchange rate widget which are free and easy-to-use, using those widgets you can easily get the exchange rates of any currency pairs. It offers history charts of currency pairs by which you can review market history and analyze rate trends. It also offers Currency Rate RSS feed, subscribing to RSS feed of your interested currency pairs you can timely receive updated content.

Major World Currencies Cross Table

Exchange Rate History Graphs

Definition of Exchange Rate

Exchange Rate (also known as forex rate, FX rate, foreign-exchange rate, or Agio) is a relative value between two currencies at which one currency can be exchanged for another currency. It is also thought as the price of one currency in terms of another currency. For example, the US Dollar (USD) — British Pound (GBP) exchange rate means the relative price of USD in terms of GBP. It is assumed that the USD/GBP exchange rate is 0.62, which means you need £0.62 to buy $1. Exchange rate is commonly used for converting currency (for travel, or oversea online shopping), engaging in speculation, or trading in the foreign exchange market.

Where to buy foreign currency in everyday life?

Currency as a medium of exchange is a system of money (monetary units) in common use. Different country uses different currency; therefore, people may need to exchange currencies in some situations. For example, when people are planning to oversea travel may buy foreign currency cash, traveler’s checks or a travel-card in their home country’s bank. As the people arrive at destination, they can buy local currency at the airport, either from a dealer or through an ATM, also can buy local currency at their hotel, a local money changer at a bank branch, or through an ATM. In addition, traveler may use a credit card to purchase goods in a store if they do not have local currency. When people oversea online shopping, they commonly use credit card to pay for.

Besides, people may invest in foreign exchange market. The foreign exchange market also called the currency market or forex (abbreviated as FX), is the world’s largest financial market. It allows investors to buy, sell, exchange and speculate on currencies, including banks, investment management firms, commercial companies, non-bank foreign exchange companies, central banks, hedge funds as speculators and retail investors.

What should you do if you would like to invest in foreign market?

Like all investments, investing in the foreign exchange market involves risk. It can bring you high profits, but also may make you bankrupt. Therefore, before deciding to invest in foreign currency, you should carefully understand all kinds of information of foreign exchange market. The forex market is the largest and most liquid market in the world, and determines the relative values of different currencies. Apart from weekends, the currency trading is continuous: 24 hours a day, from 20:15 GMT on Sunday until 22:00 GMT Friday. In forex, the exchange rate between two currencies constantly changes.

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Choosing the right time to take part in investing forex market is also extremely important. The currency reflects the strength of its corresponding economy, which is affected by a wide variety of factors, such as inflation and the state of politics and the economy. The forex market is indeed extremely volatile, investors should be well familiar with all of dynamic factors which influence the currencies values to help mitigate these risks and improve their long-term returns.

What is forex and how does it work?

Take a closer look at everything you’ll need to know about forex, including what it is, how you trade it and how leverage in forex works.

Interested in forex trading with us?

Start trading today. Call 0800 195 3100 or email newaccountenquiries.uk@ig.com. We’re available from 8am to 6pm (UK time), Monday to Friday.

Contact us: 0800 195 3100

Start trading today. Call 0800 195 3100 or email newaccountenquiries.uk@ig.com. We’re available from 8am to 6pm (UK time), Monday to Friday.

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Contact us: 0800 195 3100

What is forex trading?

Forex trading, also known as foreign exchange or FX trading, is the conversion of one currency into another. FX is one of the most actively traded markets in the world, with individuals, companies and banks carrying out around $6.6 trillion worth of forex transactions every single day.

While a lot of foreign exchange is done for practical purposes, the vast majority of currency conversion is undertaken by forex traders to earn a profit. The amount of currency converted every day can make price movements of some currencies extremely volatile – which is something to be aware of before you start forex trading.

We’re the UK’s number one retail forex provider 7 – with a range of major, minor and exotic currency pairs for you to go long or short on.

Ready to start trading forex? Open an account to get started

Курс доллара Eur Usd. Прогноз форекс 13.04.2021. Forex. Трейдинг с нуля.

Beginners’ guide to forex: learn currency trading in 6 steps

Forex trading essentials for beginners

What is a forex pair?

A forex pair is a combination of two currencies that are traded against each other. There are hundreds of different combinations to choose from, but some of the most popular include the euro against the US dollar (EUR/USD), the US dollar against the Japanese yen (USD/JPY) and the British pound against the US dollar (GBP/USD).

What are the base and quote currencies?

The base currency is always on the left of a currency pair, and the quote is always on the right. The base currency is always equal to one, and the quote currency is equal to the current quote price of the pair – which shows how many of the quote currency it’ll cost to buy one of the base. So, when you’re trading currency, you’re always selling one to buy another.

What is a pip in forex?

A pip in forex is usually a one-digit movement in the fourth decimal place of a currency pair. So, if GBP/USD moves from $1.35361 to $1.35371, then it has moved a single pip. But, if you’re trading JPY crosses, a pip is a change at the second decimal place. A price movement at the fifth decimal place in forex trading is known as a pipette.

What is a lot in forex trading?

Currencies are traded in lots, which are batches of currency used to standardise forex trades. As forex price movements are usually small, lots tend to be very large. For example, a standard lot is 100,000 units of the base currency.

Курс доллара Eur Usd. Прогноз форекс 26.04.2021. Forex. Трейдинг с нуля.

How does forex trading work?

Forex trading works like any other transaction where you are buying one asset using a currency. In the case of forex, the market price tells a trader how much of one currency is required to purchase another. For example, the current market price of the GBP/USD currency pair shows how many US dollars it would take to buy one pound.

Each currency has its own code – which lets traders quickly identify it as part of a pair. We’ve included codes for some of the most popular currencies below.

What does it mean to buy or sell a currency pair?

To buy a currency pair means that you expect the price to rise, indicating that the base currency is strengthening relative to the quote currency. To sell a currency pair means that you expect the price to fall, which would happen if the base currency weakened against the quote.

For example, you’d ‘buy’ the GBP/USD pair if you think that the pound will strengthen against the dollar – meaning you’ll need more dollars to buy a single pound. Or, you’d ‘sell’ this pair if you think that the pound will weaken against the dollar – meaning you’ll need fewer dollars to buy a single pound.

What is the spread in forex trading?

The spread in forex trading is the difference between the buy and sell prices. For example, the buy price might be 1.3428 and the sell price might be 1.3424. For your position to be profitable, you’ll need the market price to either rise above the buy price or fall below the sell price – depending on whether you’ve gone long or short.

What are margin and leverage in FX trading?

Курс доллара Eur Usd. Прогноз форекс 08.04.2021. Forex. Трейдинг с нуля.

Margin refers to the initial deposit you need to commit in order to open and maintain a leveraged position. So, a trade on EUR/GBP might only require a 3.33% margin in order for it to be opened. As a result, instead of needing £100,000 to open a position, you’d only need to deposit £3300.

Прогноз форекс 08.03.2021, курс доллара eur usd. Forex. Трейдинг с нуля. Заработок в интернете.

Why do people trade forex?

Speculating on currencies strengthening or weakening

Traders speculate on forex pairs to profit from one currency strengthening or weakening against another. When the price of a pair is rising, it means that the base is strengthening against the quote and when it’s falling, the base is weakening against the quote.

That’s because a rising price means that more of the quote are needed to buy a single unit of the base, and a falling price means that fewer of the quote are needed to buy one of the base. So, traders would likely go long if the base is strengthening relative to the quote currency, or short if the base is weakening.

Some of the most popular forex trading styles are scalping, day trading, swing trading and position trading. You might choose a different style depending on whether you have a short- or long-term outlook.

Hedging with forex

Hedging is a way to mitigate your exposure to risk. It’s achieved by opening positions that will stand to profit if some of your other positions decline in value – with the gains hopefully offsetting at least a portion of the losses. Currency correlations are effective ways to hedge forex exposure. An example would be EUR/USD and GBP/USD, which are positively correlated because they tend to move in the same direction. So, you could go short on GBP/USD if you had a long EUR/USD position to hedge against potential market declines.

Seize opportunity 24 hours a day

The forex market is open 24 hours a day thanks to the global network of banks and market makers that are constantly exchanging currency. The main sessions are the US, Europe and Asia, and it’s the time differences between these locations that enables the forex market to be open 24 hours a day.

The forex trading market hours are incredibly attractive, offering you the ability to seize opportunity around the clock. We are also the only provider to offer weekend trading on certain currency pairs, including weekend GBP/USD, EUR/USD and USD/JPY. That means you can trade these combinations when others can’t.

Learn how currency markets work

What moves the forex market?

The forex market is made up of currencies from all over the world, which can make exchange rate predictions difficult as there are many forces that can contribute to price movements. That said, the following factors can all have an effect on the forex market.

Central banks

A currency’s supply is controlled by central banks, who can announce measures that will have a significant effect on that currency’s price. Quantitative easing, for example, involves injecting more money into an economy, and can cause a currency’s price to fall in line with an increased supply.

News reports

Commercial banks and other investors tend to want to put their capital into economies that have a strong outlook. So, if a positive piece of news hits the markets about a certain region, it will encourage investment and increase demand for that region’s currency. If negative news hits, then demand might be expected to fall. This is why currencies tend to reflect the reported economic health of the region they represent.

Market sentiment

Market sentiment, which often reacts to the news, can also play a major role in driving currency prices. If traders believe that a currency is headed in a certain direction, they will trade accordingly and may convince others to follow suit, increasing or decreasing demand.

How to become a forex trader

Learn the ways to trade forex

There are several ways to trade forex, including trading spot forex, forex forwards and currency options. When you trade with us, you’ll be speculating on the price of spot forex, forwards and options either rising or falling with spread bets and CFDs.

    lets you trade forex pairs at their current market price with no fixed expiries enable you to trade forex pairs at a specified price to be settled at a set date in the future or within a range of future dates let you trade contracts that give the holder the right, but not the obligation, to buy or sell a currency pair at a set price, if it moves beyond that price within a set time frame

All of these – spot forex, forex forwards and forex options – can be traded with spread bets and CFDs. These are financial derivatives which let you speculate on whether prices will rise or fall without having to own the underlying asset.

What is a forex broker?

A forex broker provides access to trading platforms that can be used to buy and sell currencies. For example, when you trade forex with us, you’ll be able to use our award-winning platform 8 or MT4 – both of which have their own unique benefits.

Forex brokers charge a fee, usually in the form of a spread. This is the difference between the buy (offer) and sell (bid) prices, which are wrapped around the underlying market price. The costs for a trade are factored into these two prices, so you’ll always buy slightly higher than the market price and sell slightly below it.

Traditionally, a forex broker would buy and sell currencies on behalf of their clients or retail traders. But, with the rise of online trading, you can buy and sell currencies yourself with financial derivatives like spread bets and CFDs, so long as you have access to a trading platform. This is because all forex trades are conducted over-the-counter (OTC), rather than on exchange like stocks.

Discover the risks and rewards of trading forex

  • Forex is the most-traded financial market in the world, which means that forex prices are constantly moving, creating more opportunities to trade
  • Some forex pairs are more volatile than others. Those with low liquidity are often more volatile, including many ‘minor’ pairs
  • Pairs that include USD are often more liquid because as the world’s reserve currency, USD is often in high demand
  • Slippage is sometimes an issue in forex trading, given how volatile the market can be. To help mitigate the effects of slippage on your forex trades, you should add stops and limits
  • But, if you are aware of the risks and take appropriate steps to mitigate your exposure, then the forex market can be the source of your next opportunity

Free forex trading courses and webinars

To succeed when trading forex, you’ll need to take advantage of educational resources and platforms to help you build your confidence. We offer both: IG Academy and our demo account.

IG Academy has a wealth of information to get you acquainted with the markets and learn the skills needed for boosting your chances of trading forex successfully. Alternatively, you can use an IG demo account to build your trading confidence in a risk-free environment, complete with £10,000 in virtual funds to plan, place and monitor your trades.

We also offer trading strategy and news articles for all experience levels. This includes ‘novice’, like how to be a successful day trader, up to ‘expert’ – looking at technical indicators that you’ve perhaps never heard of.

Once you’ve built your confidence and feel like you’re ready to trade the live forex markets, you can create a live account with us in five minutes or less. You’ll get access to award-winning platforms, 8 expert support around the clock and spreads from just 0.6 points.

Демура — прогноз пары Евро Доллар Степан Демура курс доллара курс евро EUR EURUSD финансы инвестиции

What does forex (FX) trading mean?

Forex trading means exchanging one currency for another. Forex is always traded in pairs which means that you’re selling one to buy another.

Is there a difference between forex trading and currency trading?

USD/RUB �� прогноз курса на сегодня 28 июля 2021 �� Курс Доллара прогноз

There is no difference between forex trading and currency trading, as both mean that you’re exchanging one currency for another. When forex trading or currency trading, you’re attempting to earn a profit by speculating on whether the price of a currency pair will rise or fall.

How can I make money from forex trading?

You can make money from forex trading by correctly predicting a currency pair’s price movements and opening a position that stands to profit. For example, if you think that a pair will decline in value, you could go short and profit from a market falling.

Alternatively, if you think a pair will increase in value, you can go long and profit from an increasing market.

How can I get started trading FX?

You can get started trading FX with a forex trading account. Plus, you’ll also need to be familiar with what moves the forex market – like central bank announcements, news reports and market sentiment – and take steps to manage your risk accordingly.

What costs and fees do you have to pay when currency trading?

The costs and fees you pay when trading currency will vary from broker to broker. But, you should bear in mind that you’ll often be trading currency with leverage, which will reduce the initial amount of money that you’ll need to open a position. Be aware though that leverage can increase both your profits and your losses.

How much money is traded on the forex market daily?

Approximately $6.6 trillion worth of forex transactions take place daily, which is an average of $250 billion per hour. The market is largely made up of institutions, corporations, governments and currency speculators – speculation makes up roughly 90% of trading volume and a large majority of this is concentrated on the US dollar, euro and yen.

Is forex trading income taxable?

The tax on forex positions does depend on which financial product you are using to trade the markets.

When you trade via a forex broker or through CFDs, any gains to your forex positions are taxable. However, your losses are tax-deductible, and depending on your circumstances can also be used to offset gains made elsewhere.

Alternatively, spread bets are a tax-free way to speculate on the forex market. 9

How is the forex market regulated?

Курс доллара Eur Usd. Прогноз форекс 05.04.2021. Forex. Трейдинг с нуля.

Despite the enormous size of the forex market, there is very little regulation because there is no governing body to police it 24/7. Instead, there are several national trading bodies around the world who supervise domestic forex trading, as well as other markets, to ensure that all forex providers adhere to certain standards. For example, in the UK the regulatory body is the Financial Conduct Authority (FCA).

What are gaps in forex trading?

Gaps are points in a market when there is a sharp movement up or down with little or no trading in between, resulting in a ‘gap’ in the normal price pattern. Gaps do occur in the forex market, but they are significantly less common than in other markets because it is traded 24 hours a day, five days a week.

However, gapping can occur when economic data is released that comes as a surprise to markets, or when trading resumes after the weekend or a holiday. Although the forex market is closed to speculative trading over the weekend, the market is still open to central banks and related organisations. So, it is possible that the opening price on a Sunday evening will be different from the closing price on the previous Friday night – resulting in a gap.

Develop your forex knowledge with IG

Find out more about forex trading and test yourself with IG Academy’s range of online courses.

Develop your forex knowledge with IG

Find out more about forex trading and test yourself with IG Academy’s range of online courses.

Try these next

Glossary of trading terms

Take a look at our list of financial terms that can help you understand trading and the markets

Risk management

Be aware of the risks associated with forex trading and understand how IG supports you in managing them

Trading platforms

Discover the different platforms that you can trade forex with IG

  • What is forex and how does it work?
  • Spot FX trading explained
  • FX forwards explained
  • FX options explained

1 Bank of International Settlements Triannual Survey, 2022
2 Calculated using figures from the IMF, 2022
3 Calculated using the initial contract value for 15 October 2008
4 Calculated using data from Coin Market Cap
5 Calculated using Office of National Statistics average weekly earnings from Q3 2022
6 Calculated using a Forbes estimate of Jeff Bezos’s net worth, October 2022
7 By number of primary relationships with FX traders (Investment Trends UK Leveraged Trading Report released June 2022).
8 Awarded UK’s best trading platform at the ADVFN International Financial Awards 2022 and Professional Trader Awards 2022.
9 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.


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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.

Цена на нефть, золото XAUUSD, курс доллар рубль USD/RUB. Форекс прогноз на 28-29 января

The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.

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International Exchange Rate Law and Legal Definition

An international exchange rate, also known as a foreign exchange (FX) rate, is the price of one country's currency in terms of another country's currency. Foreign exchange rates are relative and are expressed as the value of one currency compared to another. When selling products internationally, the exchange rate for the two trading countries' currencies is an important factor. Foreign exchange rates, in fact, are one of the most important determinants of a countries relative level of economic health, ranking just after interest rates and inflation. Exchange rates play a vital role in a country's level of trade, which is critical to most every free market economy in the world. Consequently, exchange rates are among the most watched, analyzed, and manipulated economic measures.

Recent History

Prior to 1971, foreign exchange rates were fixed by an agreement among the world's central banks called the Bretton Woods Accord. This agreement was entered into after World War II. The world was in a shambles and the Bretton Woods Accord was established to help stabilize the volatile situation by pegging the U.S. dollar to gold and all other currencies of the world to the U.S. dollar. In 1971 a new agreement was formulated to replace the Bretton Woods Accord but it was short lived. In 1973 the world's currencies began to be valued and exchanged based on a free-float system, a system still in place in 2006. The free-float system is a default system of currency trading. It works strictly on supply and demand of currencies. There are no limits on how much currencies can appreciate or depreciate in value measured against other currencies. Because this can cause volatility, central banks and governments have tried to regulate the values of their currencies, but it has become an increasingly costly proposition. Although no longer an official standard, the U.S. dollar remains the benchmark currency, with the Japanese yen (¥) and European euro (€) close behind.

Currency Value Factors

A number of factors influence exchange rates. These include all of the following:

  • Relative rates of inflation
  • Comparative interest rates
  • Growth of domestic money supply
  • Size and trend of a country's balance of payments
  • Economic growth (as measured by the gross national product)
  • Dependency on outside energy sources
  • Central bank intervention

In addition to these measures of economic activity, the consensus perception of a majority of countries about the overall strength of one country's currency can have a strong impact on how that one country's currency is valued.


As nations and their economies have become increasingly interdependent, the FX market has emerged as a global focal point. With an estimated daily FX turnover exceeding $1 trillion, this is by far the world's largest market. In order to remain competitive in the world economy, it is vital to manage the risk of adverse currency fluctuations. In recent times, the worldwide trend has been toward the consolidation of markets and currencies, as in the case of the European Economic Union.

Прогноз форекс 15-19.02.2021, курс доллара eur usd. Forex. Трейдинг с нуля, трейдинг для новичков.

The largest users of the FX market are commercial banks, which serve as intermediaries between currency buyers and sellers. Corporations and financial institutions also trade currencies, primarily to safeguard their foreign currency-denominated assets and liabilities against adverse FX rate movement. Banks and fund managers trade currencies to profit from FX rate movements. Individuals also are subject to fluctuating FX rates, most commonly when a traveler exchanges his/her native currency for a foreign one before embarking on a business trip or vacation.

When the Chicago Mercantile Exchange introduced trading in foreign currency futures in 1972, it enabled all currency market participants, including individual investors, to capitalize on FX rate fluctuations without having to make or take delivery of the actual currencies. Foreign currency futures offer risk management and profit opportunities to individual investors, as well as to small firms and large companies.

There are two types of potential users of foreign currency futures: the hedger and the speculator. The hedger seeks to reduce and manage the risk of financial losses that can arise from transacting business in currencies other than one's native currency. Speculators provide risk capital and assume the risk the hedger is seeking to transfer in the hope of making a profit by correctly forecasting future price movement.


The results of companies that operate in more than one nation often must be «translated» from foreign currencies into U.S. dollars. Exchange rate fluctuations make financial forecasting more difficult for these companies, and also have a marked effect on unit sales, prices, and costs. For example, assume that current market conditions dictate that one U.S. dollar can be exchanged for 125 Japanese yen. In this business environment, an American auto dealer plans to import a Japanese car with a price of 2.5 million yen, which translates to a price in dollars of $20,000. If that dealer also incurred $2,000 in transportation costs and decided to mark up the price of the car by another $3,000, then the vehicle would sell for $25,000 and provide the dealer with a profit margin of 12 percent.

But if the exchange rate changed before the deal was made so that one dollar was worth 100 yen•in other words, if the dollar weakened or depreciated compared to the yen•it would have a dramatic effect on the business transaction. The dealer would then have to pay the Japanese manufacturer $25,000 for the car. Adding in the same costs and mark up, the dealer would have to sell the car for $30,000, yet would only receive a 10 percent profit margin. The dealer would either have to negotiate a lower price from the Japanese manufacturer or cut his profit margin further to be able to sell the vehicle.

Under this FX scenario, the price of American goods would compare favorably to that of Japanese goods in both domestic and foreign markets. The opposite would be true if the dollar strengthened or appreciated against the yen, so that it would take more yen to buy one dollar. This type of exchange rate change would lower the price of foreign goods in the U.S. market and hurt the sales of U.S. goods both domestically and overseas.

SEE ALSO Exporting


«Factors Affecting Exchange Rates.» Consensus Economics. Available from http://consensuseconomics.com/special_data.htm Retrieved on 21 March 2006.

Faff, Raboert W., and Andrew Marshall. «International Evidence on the Determinants of Foreign Exchange Rate Exposure of Multinational Corporations.» Journal of International Business Studies. September 2005.

Прогноз форекс 11.02.2021 07:30, курс доллара eur usd. Forex. Трейдинг с нуля, трейдинг для новичков

Federal Reserve Bank of San Francisco. «Long-run Determinants of East Asian Real Exchange Rates.» Available from http://www.frbsf.org/econrsrch/wklyltr/wklyltr98/el98-11.html Retrieved on 20 March 2006.

«It All Depends.» The Economist. 30 January 1999.

«Might the Dollar Eventually Follow the Precedent of the Pound and Cede Its Status as Leading International Reserve Currency?» NBER Reporter. Summer 2005.

Miller, Kent D., and Jeffrey J. Reuer. «Firm Strategy and Economic Exposure to Foreign Exchange Rate Movements.» Journal of International Business Studies. Fall 1998.

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Dollar Rate

The dollar rate is a currency’s exchange rate compared to the U.S. dollar (USD). Most currencies that are traded in international markets are quoted by the number of units of foreign currency per USD. However, some currencies, such as the euro, British pound, and Australian dollar, are quoted in terms of U.S. dollars per foreign currency.

Key Takeaways

  • The dollar rate refers to the exchange rate any given currency has with the U.S. Dollar.
  • For example, if the dollar rate to one Canadian dollar is 1.25, then takes 1.25 Canadian dollars to buy one U.S. dollar.
  • The dollar rate can be affected by the central bank or government actions to increase or decrease the supply of a country’s currency.
  • The dollar rate and its changes are known as the exchange-rate risk to holders of non-U.S. government bonds.
  • The dollar rate is affected by supply and demand, international investors, and governments.

How the Dollar Rate Works

The dollar rate is the rate at which another country’s currency converts to the U.S. dollar, so it can be thought of as how many units of currency are needed to purchase 1 U.S. dollar. For example, if the dollar rate to one Canadian dollar is 1.25, then takes 1.25 Canadian dollars to buy one U.S. dollar. If by contrast, the dollar rate on the Canadian dollar is 0.75, then a U.S. dollar could be exchanged for three-quarters of a Canadian dollar.

Importance of the Dollar Rate

The dollar rate reflects the relative value of currencies worldwide. Exchange-rate risk means that changes in the relative value of a given currency to a second currency may increase or reduce the value of investments denominated in that given currency. This is typically the most significant risk for bondholders making interest and principal payments in a foreign currency since the dollar rate affects the investor’s true rate of return.

When a currency appreciates, the country becomes more expensive and less internationally competitive. Its citizens have a greater standard of living because they buy international products at reduced prices. When the currency depreciates, local products become more competitive, and exports increase. Incomes do not cover as much when buying international products.

For example, when the dollar rate decreases, U.S. products become cheaper internationally, and U.S. companies increase their exports. Exporting firms hire more workers and employment increases. Because foreign-made products become more expensive when sold in the United States, imports decline. The United States becomes cheaper for foreign tourists, and tourism revenues increase. However, it is more expensive for Americans to travel abroad. Prices of certain imported products increase, leading to higher inflation.

Factors Influencing Dollar Rate

Supply and demand determine the price of a currency. Certain people, firms, or governments buy or sell dollars for other currencies to increase or decrease the dollar’s value. For example, American importers exchange dollars for yen at a bank, then buy Japanese cars for sale in the United States, creating a supply of dollars. Likewise, a Japanese importer exchanges yen for dollars and then buys American cars for sale in Japan, creating a demand for dollars.

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