An exchange rate is simply the price of one country’s currency expressed in another country’s currency. The exchange rate is the rate at which currencies can be exchanged.

A good example is that of the dollar vs. the euro. In April 2008, one dollar could be exchanged for 0.63 euros. The dollar is currently weak in exchange against the euro. This means the U.S. tourist planning a vacation in Europe or the Mediterranean probably won’t receive the best value for per dollar spent. » Read more: Exchange Rates Affect Holiday Plans