Term of the Day

exchange rate

Rate at which one currency may be converted into another. The exchange rate is used when simply converting one currency to another (such as for the purposes of travel to another country), or for engaging in speculation ortrading in the foreign exchange market. There are a wide variety of factorswhich influence the exchange rate, such as interest ratesinflation, and the state of politics and the economy in each country. also called rate of exchange or foreign exchange rate or currency exchange rate.
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Usage Example
Generally speaking, a higher degree of fluctuation in the exchange rate in a short period of time will command a lower premium as large fluctuations are an unlikely scenario given the long-term stability of rates.