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Here is my padlet on exchange rates! Here I will do my best to inform and teach you on how they work and why they exist. I will also go over some other information aswell!

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This website goes over the basic information on exchange rates so you can learn what it is. It also goes over how the rates work. This article tells you about forward rates which is what the predicted value of the currency will become. Predicted value can be influenced by shipping and exporting directly

I like this article because it explains what the different types of rates are such as forward, spot, floating and fixed rates are. I haven't seen this information listed in the other websites I have chosen either so I think it is useful.

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What Is Exchange Rate

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? As of September 24, 2021, the exchange rate is 1.1720, meaning it takes $1.1720 to buy €1.

Understanding Exchange Rate

Typically, an exchange rate is quoted using an acronym for the national currency it represents. For example, the acronym USD represents the U.S. dollar, while EUR represents the euro. To quote the currency pair for the dollar and the euro, it would be EUR/USD. In the case of the Japanese yen, it's USD/JPY, or dollar to yen. An exchange rate of 100 would mean that 1 dollar equals 100 yen.

Typically, exchange rates can be free-floating or fixed. A free-floating exchange rate rises and falls due to changes in the foreign exchange market. A fixed exchange rate is pegged to the value of another currency. For instance, the Hong Kong dollar is pegged to the U.S. dollar in a range of 7.75 to 7.85. This means the value of the Hong Kong dollar to the U.S. dollar will remain within this range.

Exchange rates can have what is called a spot rate, or cash value, which is the current market value. Alternatively, an exchange rate may have a forward value, which is based on expectations for the currency to rise or fall versus its spot price.

Forward rate values may fluctuate due to changes in expectations for future interest rates in one country versus another. For example, let's say that traders have the view that the eurozone will ease monetary policy versus the U.S. In this case, traders could buy the dollar versus the euro, resulting in the value of the euro falling.

Exchange rates can also be different for the same country. Some countries have restricted currencies, limiting their exchange to within the countries' borders. In some cases, there is an onshore rate and an offshore rate. Generally, a more favorable exchange rate can often be found within a country's border versus outside its borders. Also, a restricted currency can have its value set by the government.

China is one major example of a country that has this rate structure. Additionally, China's yuan is a currency that is controlled by the government. Every day, the Chinese government sets a midpoint value for the currency, allowing the yuan to trade in a band of 2% from the midpoint.

Exchange Rate Example

John is traveling to Germany from his home in New York and he wants to make sure he has 200 dollars' worth of euros when he arrives in Germany. He goes to the local currency exchange shop and sees that the current exchange rate is 1.20. It means if he exchanges $200, he will get €166.66 in return.

In this case, the equation is: dollars ÷ exchange rate = euro

-or-

$200 ÷ 1.20 = €166.66

John has returned from the trip, and he now wants to exchange his euros for dollars. He never used his €166.66 and now sees the exchange rate has dropped to 1.15. He exchanges his €166.66, and because the rate fell when he was away, he receives only $191.67. The reason he gets less despite having the same value of euros is that the euro weakened versus the dollar during his time away.

In this case, the equation is the opposite: euros x exchange rate = dollars

-or-

€166.66 x 1.15 = $191.66

However, not all currencies work the same way. For example, the Japanese yen is calculated differently. In this case, the dollar is placed in front of the yen, as in USD/JPY.

The equation for USD/JPY is: dollars x exchange rate = yen

Let's say someone traveling to Japan wants to convert $100 into yen, and the exchange rate is 110. The traveler would get ¥11,000. To convert yen back into dollars one needs to divide the amount of the currency by the exchange rate.

$100 x 110 = ¥11,000.00

-or-

¥11,000.00/110= $100

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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? As of September 24, 2021, the exchange rate is 1.1720, meaning it takes $1.1720 to buy €1.

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This article explains how importing and exporting goods affect the exchange rates between countries and what makes the dollar value rise or sink. It also touches on how the rate affects you as a person living in that country. The higher the dollar value is for the citizens the better off and advanced the country is compared to others. It also can determine where is cheaper or more expensive to travel too if your looking to leave your current country

What I liked about this article is that it explained how the exchange rate affects the people of the country they reside in.

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Exchange rates tell you how much your currency is worth in a foreign currency. Think of it as the price being charged to purchase that currency. Foreign exchange traders decide the exchange rate for most currencies. They trade the currencies 24 hours a day, seven days a week. This market trades $5.3 trillion a day.

You must plan for exchange rate values when you travel overseas. When the U.S. dollar is strong, you can buy more foreign currency and enjoy a more affordable trip. If the U.S. dollar is weak, your trip will cost more because you can't buy as much foreign currency. Since the exchange rate varies, you might find the cost of your trip has changed since you started planning it. It's one of the ways ​ exchange rates affect your personal finances.

You can Google the U.S. dollar to foreign currency exchange rate to get today's rate. It also shows a chart revealing whether the dollar is strengthening or weakening. If it's strengthening, you can wait until right before your trip to buy your currency. Check to see if your credit card company charges conversion fees. If not, then using your credit card overseas will get you the cheapest exchange rate. If the dollar is weakening, you might want to buy the foreign currency now rather than waiting until you travel.

Banks charge a higher exchange rate, but it might be cheaper than what you'll pay in the future. Here are the recent changes in the euro to dollar exchange rate.

Other currencies, like the Saudi Arabian riyal, rarely change. That's because those countries use fixed exchange rates that only change when the government says so. These rates are usually pegged to the U.S. dollar. Their central banks have enough money in their foreign currency reserves to control how much their currency is worth. To keep the exchange rate fixed, the central bank holds U.S. dollars. If the value of the local currency falls, the bank sells its dollars for local currency. That reduces the supply in the marketplace, boosting its currency's value.

It also increases the supply of dollars, sending its value down. If demand for its currency rises, it does the opposite.

The Chinese yuan used to be a fixed currency. Now the government is slowly transitioning to a flexible exchange rate. That means it changes less frequently than a flexible exchange rate, but more frequently than a fixed exchange rate. Here is the most recent yuan to dollar conversion rate.

The demand for a country's currency depends on what is happening in that country. First, the interest rate paid by a country's central bank is a big factor. The higher interest rate makes that currency more valuable. Investors will exchange their currency for the higher-paying one. They then save it in that country's bank to receive the higher interest rate.

Second, is the money supply that's created by the country's central bank. If the government prints too much currency, then there's too much of it chasing too few goods. Currency holders will bid up the prices of goods and services. That creates inflation. If way too much money is printed, it causes hyperinflation. That usually only happens when a country must pay off war debts. It's the most extreme type of inflation.

Some cash holders will invest overseas, where there isn't inflation. But they'll find that there isn't as much demand for their currency since there's so much of it. That's why inflation will push the value of a currency down.

Third, a country's economic growth and financial stability impact its exchange rates. If the country has a strong, growing economy, then investors will buy its goods and services. They'll need more of its currency to do so. If the financial stability looks bad, they will be less willing to invest in that country. They want to be sure they will get paid back if they hold government bonds in that currency.

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Exchange rates tell you how much your currency is worth in a foreign currency. Think of it as the price being charged to purchase that currency. Foreign exchange traders decide the exchange rate for most currencies. They trade the currencies 24 hours a day, seven days a week.

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This article explains and goes over how the exchange rate will affect a person's business. If the business is importing goods or supplies from a country with a high exchange rate it might not be very effective at making a profit. if this is the case that businesses should look elsewhere to get the same product but at a different price.

I took away that businesses big or small use exchange rates very frequently. It helps them decide what to sell products at to get the most profit while not overcharging for a cheap product that no one will buy.

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As the world becomes increasingly interconnected through the forces of globalization and the march of technology, the role of the small business owner has changed dramatically.

Once upon a time, most small businesses were essentially local businesses, producing goods and services for, and acquiring supplies from, a network of customers and vendors that were located close to home, usually in the same city or state, and always in the same country.

While globalization has provided entrepreneurs with a host of benefits, including an expanded marketplace into which to sell their products and the opportunity to comparison shop for goods from around the world, it has also presented a host of new challenges. If your business is attempting to sell to a global customer base, you are no doubt familiar with the trials of understanding the idiosyncrasies of different markets and cultures, in addition to the sometimes-daunting task of attempting to communicate in a foreign language.

With all of these things to worry about in today's global environment for small-business owners, many may not have had the time to fully understand how foreign currency exchange rates, which are a truly global phenomenon touching all international transactions, affect your business. Let's take a look at how the foreign exchange markets work, their effects on business owners, and some strategies for coping with fluctuations in the exchange rates that affect your business.

What Are Exchange Rates?

Simply put, the exchange rate between two currencies is the rate at which one currency can be exchanged for the other. For example, if the U.S. dollar to Japanese yen exchange rate is 80, then 1 U.S. dollar will buy you 80 Japanese yen, and of course it follows that it will take 80 Japanese yen to purchase 1 U.S. dollar.

The level of the exchange rate between any two currencies is determined by a host of factors including the pace of economic activity, the level of market interest rates, the gross domestic product, and the unemployment rate in each of the countries in question. Exchange rates are set in the global financial marketplace, where banks and other financial institutions trade currencies around the clock based upon their views on the above-mentioned factors as well as their own financing needs and investing strategies.

Because of the twenty-four hour global nature of currency markets, exchange rates are constantly shifting from day to day and even from minute to minute, sometimes in small increments and sometimes quite dramatically.

For entrepreneurs, changes in exchange rates affect their businesses in two main ways: by changing the cost of supplies that are purchased from a different country, and by changing the attractiveness of their products to overseas customers.

How Exchange Rates Can Affect Your Business

We'll begin by looking at things from the point of view of a business owner who is dependent upon an overseas supplier for some or all of his raw materials or services.

In our example we'll assume that the business owner is located in the U.S. and has a company that makes wool sweaters. He has determined that he prefers to buy wool from a provider in New Zealand, where the sheep are plentiful and the quality is excellent, and has agreed upon a price per pound of wool in U.S. Dollars that is profitable for his business. Things are moving along smoothly for a while, but a few months later when he goes to place his next order, he discovers that his supplier is charging 10% more for the same amount of wool. What happened?

While there could be a number of reasons for the price increase, in our example we're going to assume that is was entirely driven by a change in the exchange rate between the U.S. dollar and the New Zealand dollar (affectionately dubbed the "kiwi" by currency traders). Specifically what has happened is that the U.S. dollar has lost 10% of its value versus the Kiwi. And while our sweater-maker has always paid for his purchases in U.S. dollars, what he may not have realized is that those dollars aren't much good to someone living in New Zealand. Therefore his supplier must convert those U.S. dollars into New Zealand dollars, and because of the fall in the value of the U.S. dollar the supplier now needs 10% more U.S. dollars per pound of wool in order to maintain his same level of profitability.

Now let's think about what happens when our sweater-maker goes to sell his products to customers around the world via his online store. He sets all of his prices in U.S. dollars but sells his products to customers who earn their livings in any number of different currencies. Thus, if the price of the U.S. dollar falls relative to the home currencies of some of his customers, his products will essentially become cheaper for them, but if the price of the U.S. dollar rises against some other customers' home currencies, his products will seem more expensive to them.

Managing Affects of Exchange Rate Changes

So, how is a small business owner supposed to manage the effects that currency rates can have on both his purchases and sales? The most important thing to do is to stay informed of the level and direction of the exchange rates that matter to your business (i.e. those of the countries that you buy from or sell to).

If you find that a weaker U.S. dollar is driving up the price that you have to pay to foreign suppliers, you may want to look for alternative suppliers either at home or in countries with a more favorable exchange rate. And if the U.S. dollar is getting stronger but your foreign suppliers are not adjusting their prices downward, it may be time for you to renegotiate your contracts with the knowledge that your dollars are now worth more than they used to be.

As for the sales side of the equation, it may pay to ramp up your marketing efforts in countries whose currencies have appreciated versus the U.S. dollar, as your products are effectively on sale there without you having to drop the price.

Finally, there is the option to hedge the risk of your exposure to fluctuations in foreign currency via the financial markets, but this is something you would need to discuss with a reputable financial professional with expertise in the field.
Next: Investing In Your Company vs. Stock Market

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How Exchange Rates Affect Your Business | Harvard Business Services

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As the world becomes increasingly interconnected through the forces of globalization and the march of technology, the role of the small business owner has changed dramatically. Once upon a time, most small businesses were essentially local businesses, producing goods and services for, and acquiring supplies from, a network of customers and vendors that were located close to home, usually in the same city or state, and always in the same country.

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This article goes over the different types of markets you will deal with when buying, selling, or simply exchanging money into different currencies. It also goes over investments in foreign currency as well and what it all means with some benefits and repercussions.

I found this article it gave insight on how investing in foreign currency can make you a lot of money but also puts you at risk of loss. It also explained a little about what happens when you do invest in foreign currency.

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I included this video in my padlet because it is very informative on floating vs fixed exchange rates. Floating exchange rates are based on the market forces and what the economy is like in that specific country. Fixed exchange rates are when the government tries to control the value of its own currency.

I chose this video because I really didn't know that there were floating and fixed rates. I thought it was just one rate based on another country's value. I found it interesting that if a country imports and exports a lot of goods it will affect the rate while if they don't it won't affect the rate that

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Floating vs. Fixed Exchange Rates- Macroeconomics 5.4

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In this video, it talks about how the exchange rate is affected and who it affects most of all people. If the exchange rate is high in the importing country, companies will outsource to other areas to find a better rate with the same quality of the product. This market is good for exporters because they will be making more money but can also hurt their business.

I found this video interesting and it definitely helped me personally when looking at buying things outside of Canada. Always buy stuff when the rate is low so it will be cheaper for you

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Different countries will demand different currencies. The citizens of the country's currency don't demand their own they demand from others. They do this because it is cheaper at the time than when it goes high they can convert it making some money in the process. Over time the value of the other currency can appreciate in value which can lead to higher or lower returns.

I learned that when doing forex you want to pick a country with a higher interest rate to seek out the higher return value on your investment. It may however be more money to get into at the start butt can pay out well

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This video is more like a crash course on the whole exchange rates topic. It touches on a lot of different things such as demand and the effect it has. Also covers what a weak dollar and strong dollar mean in terms of exchanging currency and the effects of each one.

I liked this video because he gave a chart when comparing the differences on how a rate is affected, so you can see side by side how each is different. The presenter also did really well in explaining everything quickly and effectively.

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I chose this image so you can visualize what a changing dollar value looks like over time. This graph compares the Canadian dollar to the US dollar

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This picture shows what it is like to convert currency from one to another. This chart is helpful if you are doing forex so you can plan out what you would like to buy into.

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1) I learned that alot more than just countrys wealth is what makes up an exchange rate. Its primarily effected on supply and demand of countries.  I found that interesting to me as I did not know about this information

2) This topic is relavent to me because I use and deal with eBay quite frequently. So knowing when to buy something and when not to buy something from overseas will help me save some money and make money in the future.

3) I would pass on the information of knowing when and when not to buy something from another country. This will help them see they can get the same thing cheap from different areas of the world