Currency exchange rates reflect the economy of one country as compared to another country. With foreign currency traded in pairs, the rate changes when the values of either of the currencies change.
A country’s economic status has a big impact on demand for the currency. Demand for the currency decreases, and foreign currency exchange rates fall. Worldwide interest rates also directly affect currency rates.
The most commonly traded currencies are known as the Majors - USD (US dollars), JPY (Japanese Yen), EUR (Euro), GBP (British pound sterling), CAD (Canadian dollars), AUD (Australian dollars) and CHF (Swiss francs). Currency exchange quotations always give 2 prices for each currency pair - the Bid price (the rate at which a buyer is prepared to buy currency), and the Ask price (the price at which a seller is willing to sell the currency). Currency rates change all the time. Studying currency conversion rates is only half the battle.