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An Overview of Foreign Exchange Rates

Foreign exchange rates have a direct impact on the everyday lives of people around the world. We all participate in this massive financial market when we buy or travel to another country.  When traveling, most people are affected by currency exchange rates. There is no way to pay for anything in Europe with a U.S. dollar. You'll need to exchange some of your US dollars for Euros before you leave for Europe, or you can get Euros once you get there. The Value of Money Modern economies are heavily reliant on their own currency. In this way, the value of goods can be determined in all countries. When comparing the cost of one currency to another, the foreign exchange rate is known as the exchange rate. If you need US dollars but only have British pounds, you can get $1.52 for one British pound by exchanging it for US dollars. The Evolution of the US Dollar's Exchange Rate Gold reserves used to be the sole determinant of the value of every currency in existence. Governments were req