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Exchange Rates

An exchange rate is the value of one nation's currency versus the currency of another nation or economic zone. For example, how many U.S. dollars does it take to buy one euro? Most exchange rates are free-floating and will rise or fall based on supply and demand in the market. Some currencies are not free-floating and have restrictions.

Free Floating

A free-floating exchange rate rises and falls due to changes in the foreign exchange market. 


Restricted Currencies

Some countries have restricted currencies, limiting their exchange to within the countries' borders. Also, a restricted currency can have its value set by the government.

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