The price of one currency in terms of another
An exchange rate is what it costs to swap one currency for another. It moves with interest rate differences, trade flows and the economic outlook, and it trades around the clock. Hold a foreign asset and its value in your own currency changes even when its local price does not. The rate quoted in the news is exactly this price.
If the dollar moves from 150 to 155 yen, a $10,000 asset goes from 1.5 million to 1.55 million yen.
South Korea — Measured in won, a move from 1,400 to 1,450 per dollar takes a $10,000 asset from 14 million to 14.5 million won.
For learning, not investment advice. Decisions are your own.
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