The rate at which one currency can be exchanged for another in foreign exchange markets.
A currency exchange rate is the value of one currency expressed in terms of another. For example, if the EUR/USD rate is 1.10, one euro equals $1.10. Exchange rates fluctuate based on supply and demand, interest rate differentials, inflation, geopolitical events, and economic data. Travelers and international businesses care about exchange rates because they affect the cost of foreign purchases and business transactions. Exchange rates are quoted in pairs and include both the "bid" (what buyers will pay) and "ask" (what sellers demand). Major pairs like EUR/USD are highly liquid and tightly quoted; exotic pairs have wider spreads. You can monitor rates through financial websites, and banks and currency exchanges charge fees on top of the market rate.