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What Is an Exchange Rate?

By Kristi WaterworthUpdated Dec 16, 2024 at 2:01 PM

Key Points

  • Exchange rates define the cost of one currency in terms of another and fluctuate based on economic factors.
  • Key influencers of exchange rates include interest rates, inflation, and political stability.
  • Investors consider exchange rates crucial for forex trading and international business operations.

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