Exchange rates are the values at which one currency can be exchanged for another. For example, if you want to convert US dollars to euros, the exchange rate tells you how many euros you will receive for each dollar. These rates fluctuate based on various factors, including economic conditions, interest rates, and market demand. When traveling or doing business internationally, understanding exchange rates is crucial. A favorable exchange rate means you get more foreign currency for your money, while an unfavorable rate means you receive less. This can impact how much you spend on goods and services abroad.