Foreign exchange is the buying and selling of money from other countries. It enables you to pay for goods and services that originate in another country in the currency of that country.
The rate at which the money of one country is bought or sold for that of another is called the foreign exchange rate. For example, one Australian dollar might buy 80 US cents.
In Australia, we use a floating exchange rate system, meaning that the value of the Australian dollar can rise and fall from day to day, depending on the demand for our currency. An unexpected surge or slump in the value of the Australian dollar can put a hole in your pocket – or a smile on your face, depending which side of the fence you’re on.
For example, an increase in the value of the Australian dollar is good if you are planning to travel overseas, as it means you can buy more foreign money. If the dollar falls, then you may have to spend more Australian money to buy another currency.
These branches have foreign exchange booths that can help you with your foreign exchange needs.
The Foreign Exchange Glossary provides a detailed explanation of commonly used foreign exchange terms.