Exchange rate - Definitions from Dictionary.com

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Dictionary.com Unabridged (v 1.1) - Cite This Source - Share This

exchange rate

–noun

the ratio at which a unit of the currency of one country can be exchanged for that of another country.

Also called rate of exchange.

[Origin: 1895–1900

]

Dictionary.com Unabridged (v 1.1)
Based on the Random House Unabridged Dictionary, © Random House, Inc. 2006.

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Encyclopædia Britannica, Inc.
Exchange rate

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American Heritage Dictionary - Cite This Source - Share This

exchange rate
n. A rate of exchange.

(Download Now or Buy the Book)

The American Heritage® Dictionary of the English Language, Fourth Edition
Copyright © 2006 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.

WordNet - Cite This Source - Share This

exchange rate
noun
the charge for exchanging currency of one country for currency of another [syn: rate of exchange]

American Heritage New Dictionary of Cultural Literacy, Third Edition - Cite This Source - Share This
exchange rate

The price at which one currency can be purchased with another currency or gold. At any time, for example, one U.S. dollar can purchase a certain number of EU euros or Japanese yen.

[Chapter:] Business and Economics

The American Heritage® New Dictionary of Cultural Literacy, Third Edition
Copyright © 2005 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.

Investopedia - Cite This Source - Share This

Exchange Rate

The price of one country's currency expressed in another country's currency. In other words, the rate at which one currency can be exchanged for another.

Investopedia Commentary

In most financial papers, currencies are expressed in terms of U.S. dollars, while the dollar is commonly compared to the Japanese yen, the British pound and the euro.

Wallstreet Words - Cite This Source - Share This
exchange rate

The price of one currency expressed in terms of another currency. For example, if the U.S. dollar buys 1.40 Canadian dollars, the exchange rate is 1.4 to 1. Changes inexchange rates have significant effects on the profits of multinational corporations. Exchange rate changes also affect the value of foreign investments held by individual investors. For a U.S.investor owning Japanese securities, a strengthening of the U.S. dollar relative to the yen tends to reduce the value of the Japanese securities because the yen value of the securities is worth fewerdollars. Also called foreign exchange rate. See also devaluation, fixed exchange rate, floating exchange rate, foreign exchangerisk.

How do currency exchange rates influence investment values?

When the exchange rate between the foreign currency of an internationalinvestment and the U.S. dollar changes, it can increase or reduce your investment return. Because foreign companies trade and pay dividends in the currency of their local market, you will need toconvert the cash you receive from dividends or the sale of the investment into U.S. dollars. Therefore, if the exchange rate changes significantly between the time you buy and the time you sell, it cansometimes turn a positive return in the investment itself into a loss for the investment in total, or vice versa.

International investment returns increase when the dollar weakens in value againstanother currency, because each unit of foreign currency translates into more U.S. dollars. On the other hand, if the U.S. dollar strengthens against the foreign currency, it translates each foreigncurrency unit into fewer U.S. dollars and therefore diminishes your returns.

Thomas M. Tarnowski, Senior Business Analyst, Global Investment Banking Division,Citigroup, Inc.Salomon Smith Barney, New York, NY, and London, UK