What is Exchange Rate?

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The **Exchange Rate** is the price of one country's currency expressed in terms of another country's currency, representing the ratio at which two currencies can be exchanged in the global foreign exchange (FX) market. This rate is the fundamental metric that governs international trade, capital flows, and investment decisions, fluctuating constantly in a free-floating system based on the dynamic forces of supply and demand.

Exchange Rate

What is Exchange Rate?

How are exchange rates determined in the global foreign exchange market, and what are the key economic drivers of their fluctuation?

What are the primary types of exchange rates used in FX trading, and how do the spot and forward rates differ in their calculation and purpose?

How do professional traders and corporations utilize exchange rates in the distinct strategies of arbitrage and hedging?

Why are exchange rate fluctuations a critical factor for global economic stability and the financial performance of multinational corporations?

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