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The price to exchange one U.S. dollar for one unit of a foreign currency is called an exchange rate. The exchange rate of the U.S. dollar varies for different foreign currencies, which fluctuate daily based on a number of factors.
Currency exchange rates affect travel, exports, imports and the economy. In this article, we'll discuss the nature of currency exchange and its effect on people and the economy. Before delving into the topic in more detail, we must first establish a constant; for demonstration purposes we will be talking about the relationship between the euro and the U.S. dollar.