Definition of Exchange Rate

Definition: An exchange rate is the current market price for which one currency can be exchanged for another. If the U.S. exchange rate for the Canadian Dollar is $1.60, this means that 1 American Dollar can be exchanged for 1.6 Canadian dollars.

Terms related to Exchange Rates:

• Short Rate
• Bill of Exchange
• Purchasing Power Parity

About.Com Resources on Exchange Rates:

• Economics - A Beginner's Guide to Exchange Rates
• The Canadian Exchange Rate
• Exchange Rates: What to Use as the Base?

Writing a Term Paper? Here are a few starting points for research on Exchange Rates:

Books on Exchange Rates:

• Money, Exchange Rates, and Output
• The Economics of Exchange Rates
• Imperfect Knowledge Economics: Exchange Rates and Risk

Journal Articles on Exchange Rates:

• Forward Exchange Rates as Optimal Predictors of Future Spot Rates: An Econometric Analysis
• Modelling the Coherence in Short-Run Nominal Exchange Rates: A Multivariate Generalized Arch Model
• Capital Mobility and Stabilization Policy under Fixed and Flexible Exchange Rates