When the exchange rate for the British pound changes from $1.80 per pound to $1.60 per pound, then, holding everything else constant, the pound has depreciated American wheat sold in Britain becomes more expensive.
An exchange rate determines the price at which one currency will be exchanged for another and has an impact on international trade and money transfers. Both the value of the home currency and the value of the foreign currency have an impact on exchange rates. The U.S. dollar to the euro exchange rate in July 2022 was 1.02, meaning it costs $1.02 to buy one euro.
What Impact Do Exchange Rates Have on Supply and Demand for Goods?
Changes in exchange rates have an impact on businesses by altering the cost of commodities imported from other nations and the demand for their goods from international clients.
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