In economics, the value of one currency expressed in another currency is called an exchange rate.
An exchange rate tells people how much of one currency is needed to buy a unit of another. For example, a quoted rate might show how many U.S. dollars exchange for one euro. Rates can be expressed in either direction, so the quotation convention matters when interpreting whether a currency has strengthened or weakened.
Exchange rates affect international trade, travel, investment, and the domestic prices of imported goods. An appreciation makes a currency more valuable relative to another currency; it can make imports cheaper but may make a country’s exports less competitive. A depreciation has the opposite general effects.
Some countries allow currencies to float according to market forces, while others peg or manage them against another currency or a basket. Central-bank interest rates, trade flows, inflation expectations, and capital movements can all influence exchange rates.