exchange rate

noun

Definition of exchange rate

: the ratio at which the principal unit of two currencies may be traded

Examples of exchange rate in a Sentence

Recent Examples on the Web

Cook lays out a bunch of reasons, including a slowing market in China and the effects of international exchange rates. — Eric Limer, Popular Mechanics, "Apple's in Trouble for the First Time in a Long Time, And You Already Know Why," 3 Jan. 2019 Ironically, the continuing slide of sterling relative to other currencies could possibly have helped things—thanks to a declining exchange rate, the project only needed $31 million this week instead of $33 million back in October. — Jonathan M. Gitlin, Ars Technica, "Bad news for the 1,000mph car as Bloodhound SSC is shut down," 11 Dec. 2018 One probable outcome is that the exchange rate will become more volatile. — The Economist, "China’s vanished current-account surplus will change the world economy," 17 May 2018 Azour said one of the most pressing issues facing Iran is aligning the official local currency exchange rate with black market rates. — Aya Batrawy, The Seattle Times, "IMF: Mideast oil producers buoyed by higher prices, for now," 13 Nov. 2018 To spot the change, customers generally would have to log in to their accounts and compare the rate AmEx was offering to the market exchange rate at the time of the transaction. — Annamaria Andriotis, WSJ, "American Express Gave Small Businesses One Rate, Then Secretly Raised It," 30 July 2018 Venezuela’s Efecto Cocuyo (Firefly Effect) reports facts that the regime tries to hide, including murder counts and the black-market exchange rate (see article). — The Economist, "Latin America’s new media are growing up," 14 July 2018 One sheet labeled About includes information about the country, like the exchange rate or cultural etiquette (to tip or not to tip?). — New York Times, "Ready for Vacation? Here’s the Best Tech for Trip Planning," 4 July 2018 While that’s just $17 at black-market exchange rates, compares that to a month’s minimum wage of about $1. — Patricia Laya, Bloomberg.com, "The Army Took Over the Spigots, Forcing Thirsty Venezuelans to Pay," 25 June 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'exchange rate.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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10 Jan 2019

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The first known use of exchange rate was in 1855

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More Definitions for exchange rate

exchange rate

noun

Financial Definition of exchange rate

What It Is

An exchange rate between two countries' currencies indicates the value of one currency relative to the other.

How It Works

On June 16, 2010, the exchange rate between the dollar and the euro was 1.23 $/€. This means that to obtain one euro, you would need 1.23 dollars. Conversely, if you were about to take a vacation to Europe, you could take $1,000 to the bank and receive €813.01.

Exchange rates can be fixed or floating. If a country fixes its currency to that of another country, the exchange rate between those two currencies will not change. If a country has a floating exchange rate, the rate between its currency and any other currency will adjust to market conditions.

Why It Matters

The exchange rate between two currencies plays a major role in international trade and investment. For instance, if the dollar appreciates, or gains value, relative to the euro, Americans traveling in Europe will have greater purchasing power, but it will be more difficult for the U.S. businesses to export goods.

Changes in the exchange rate are subject to a wide range of factors, such as interest rates, price levels and expected future market conditions.

Source: Investing Answers

exchange rate

noun