verifiedCite
While every effort has been made to follow citation style rules, there may be some discrepancies. Please refer to the appropriate style manual or other sources if you have any questions.
Select Citation Style

What determines currency exchange rates?

Exchange rates are determined by supply and demand in the global currency market. Traders, businesses, investors, and central banks buy and sell currencies for reasons ranging from international trade to speculation. Interest rates, inflation, economic growth, government policy, and investor sentiment can all influence how much one currency is worth relative to another.