Discover and compare exchange rates for global currencies using our essential data insights from FocusEconomics. We provide historical data and exchange rate forecasts for virtually every country in the world, with forecasts out to 2033. This invaluable information will help you to navigate any decision making, financial reporting or country performance evaluations for your business.
Why our exchange rate historical data and forecasts are compared against the U.S Dollar
The comparative analysis of exchange rates against the U.S. Dollar is a fundamental practice grounded in the dynamics of international currency markets. An exchange rate, delineating the value of a nation’s currency concerning another, serves as a pivotal economic indicator. For instance, if the exchange rate between the U.S. Dollar (USD) and the Japanese Yen (JPY) stands at 120 yen per dollar, it denotes that one U.S. Dollar can be exchanged for 120 Yen in the global foreign exchange markets.
This concept of exchange rates involves two integral components: a base currency and a counter currency. Owing to the preeminent status of the U.S. Dollar as a global reserve currency, it routinely assumes the role of the base currency, with the domestic currency acting as the counter currency. Exceptions to this norm are observed in the case of the Euro and some currencies within the Commonwealth (e.g., British Pound, Australian Dollar, New Zealand Dollar), where the domestic currency serves as the base.
Why information on global exchange rates is essential for international businesses
Data on exchange rates is useful for your business for several reasons:
1. Risk Management
Businesses involved in international trade are exposed to exchange rate fluctuations. Understanding the historical and future trends helps in assessing the potential risks associated with currency movements. This information aids in developing effective risk management strategies, such as using financial instruments like forward contracts or options to hedge against adverse exchange rate movements.
2. Budgeting and planning
Exchange rate forecasts enable businesses to make more accurate projections for budgeting and financial planning. It helps in estimating costs, revenues, and profits, taking into account the potential impact of currency fluctuations.
3. Market Expansion
When entering new international markets, businesses need to consider the currency risk associated with operating in different regions. Exchange rate forecasts help in assessing the stability of a particular currency and the potential impact on costs and revenues.
