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The foreign exchange rate is determined by the market supply and demand. A currency exchange rate shows how much one unit of a currency can be exchanged for another. There are two types of currency exchange rates: floating, which means they constantly change based on a variety of factors and pegged (fixed), which means they follow the direction of the currency they are paired with. By understanding the value of a home currency in relation to different foreign currencies, investors are able to analyze assets priced in foreign currency. Find out how foreign exchange rates are determined in this comprehensive guide.
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- 17 Feb 2026
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