Sunday, April 20, 2008

Exchange rate

In finance, the exchange rates that are different names are also known as the foreign-exchange rate, forex rate or FX rate between two currencies specify how much one currency is value in terms of the other. For example an exchange rate of 102 Japanese yen (JPY, ¥) to the United States dollar (USD, $) means that JPY 102 is worth the same as USD 1. The foreign exchange market is one of the largest markets in the world. By some estimate, about 2 trillion USD worth of currency changes hands every day.
The spot exchange rate refers to the current exchange rate. The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a exact future date.

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