Online Currency Exchange

Categories: International, Forex

An online currency exchange is layman’s terms for an online foreign exchange, or forex. Like most exchanges these days, the majority of forex markets are online. Online currency exchanges, or forex markets, are where you can go to convert one currency into another currency.

As the supply and demand for different currencies change daily, so do exchange rates between currencies on online currency exchanges. Some countries have their currency pegged to another...many to the U.S. dollar, of course..and some are set by the government in other ways. But for most currencies, free floating is the way to go, letting their currency exchange rates rise and fall with the change in supply and demand for their currency.

A nation’s currency is affected by just about everything in the macroeconomy that brushes shoulders with other countries: trade policy, geo-political cat fights, and foreign investment. And yes, of course, we'll have to see how Bitcoin shakes out. Is it a Thing? Or...not so much?

See: Foreign Exchange.

Find other enlightening terms in Shmoop Finance Genius Bar(f)