Every day, currencies worth more than $1.2 trillion change hands around the globe, and about 83% of these transactions involve U.S. dollars. The exchange rate is the price at which one nation’s currency trades for another’s. Economists often distinguish between nominal exchange rates, which are the values quoted by banks and newspapers, and real exchange rates, which are conceptual.
Suggested citation: “Exchange Rates,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-02, pp. 19, 02.01.1998.