Nominal Exchange Rate

See: Real Exchange Rate.

When anything is “nominal,” it is just...named. That is, the nominal exchange rate between a U.S. Dollar and a euro might be 1:1. But that euro might be buying more or less than the U.S. Dollar buys this week, this month, this year.

Eventually, the exchange rates adjust, but at any given moment, the real buying power doesn’t. So exchange rates exist in real, day-to-day life in nominal form. So many dollars for so many euro. And then whoever exchanges to buy them deals with better or worse buying power at the market. Caveat Emptor.