Foreign Exchange Rates
- An exchange rate is the price of one currency in terms of another e.g. £1 = €1.18
- International currencies are essentially products that can be bought & sold on the foreign exchange market (forex)
- International currencies are essentially products that can be bought & sold on the foreign exchange market (forex)
- The Central Bank of a country controls the exchange rate system that is used in determining the value of a nation's currency
- Three of the main exchange rate systems are
- A floating exchange rate
- A fixed exchange rate
- A managed exchange rate