Glossary · Money and central banks
Exchange rate
An exchange rate is the price of one currency in another: how many dollars you pay for one euro, or how many yen one dollar buys.
Also called: currency exchange rate, FX rate, forex rate, EUR/USD
ECB reference rate, November 11, 2026
November 11, 2026
In plain words
Going on a trip to Europe? At the airport you trade dollars for euros, and the board shows something like “1 EUR = 1.10 USD”. That is an exchange rate: the price of one currency paid in another. The European Central Bank’s reference rate on November 11, 2026 was $1.1127 for one euro.
Most big currencies float: their exchange rates are set every second by banks, companies and investors buying and selling them, and if more people want euros, the euro gets dearer. Some countries instead peg their currency, fixing it to the dollar or the euro and defending that rate with their reserves.
Exchange rates decide what imports cost you and what your country’s exports cost foreigners. A stronger dollar makes a European holiday cheaper for Americans and American goods dearer abroad.
Example
A €50 museum ticket at three exchange rates
- At €1 = $1.00 it costs an American $50.00.
- At €1 = $1.20 it costs $60.00: the euro is stronger, the dollar weaker.
- At the ECB rate of $1.1127 (November 11, 2026) it costs about $55.63.
- Flip it: a European buying a $50 American book pays €50 at $1.00, but only €41.67 at $1.20.
A 20% rise of the euro makes Europe 20% dearer for Americans and America about a sixth cheaper for Europeans.
One level deeper
What moves exchange rates? Interest rates (money flows to where it earns more), inflation (a currency that loses value at home loses it abroad too), trade, growth and plain fear: in a global panic investors rush into dollars, yen and Swiss francs. In the short run rates jump around unpredictably; over decades they tend to follow differences in inflation, the idea behind purchasing-power parity.
Quotes come in pairs. EUR/USD at $1.1127 means one euro costs that many dollars; USD/JPY at ¥159.23 means one dollar buys that many yen. Banks and exchange booths add a margin on top of these market rates, which is why the airport rate is worse.
The euro started trading in January 1999 at $1.1789. It sank to $0.8252 in October 2000 and climbed to $1.5990 in July 2008. At its high the euro was worth 94% more dollars than at its low.
The euro in dollars since 1999
How many dollars one euro bought, month by month. Above $1 a euro is worth more than a dollar; below $1, less. It has been on both sides.
The numbers behind the chart
| Date | Value |
|---|---|
| Jan 1999 | 1.1610 |
| Dec 2000 | 0.8973 |
| Dec 2010 | 1.3220 |
| Dec 2020 | 1.2170 |
| Dec 2022 | 1.0590 |
| Dec 2023 | 1.0900 |
| Dec 2024 | 1.0480 |
| Dec 2025 | 1.1710 |
| Nov 2026 | 1.1200 |
Why it matters
It sets the price of every import and every trip abroad, and the profits of companies that sell abroad.
Investors who buy foreign stocks or bonds win or lose on the currency too: a 10% gain abroad can vanish if that currency falls 10% against yours.
Central banks watch it closely, because a falling currency pushes up import prices and inflation.
A common mistake
Myth: A strong currency is a sign of a strong economy, a weak one of a weak economy.
In fact: Not necessarily. Exchange rates swing with interest rates and investors’ moods. A cheaper currency helps exporters and tourism; a dearer one helps importers and travelers abroad. Some countries prefer a weaker currency on purpose.
Questions people ask
How are exchange rates determined?
For most big currencies, by supply and demand in the currency market, the largest market in the world, where trillions of dollars change hands every day. Some countries fix their rate to another currency and use their reserves to hold it there.
What does EUR/USD mean?
It is the price of one euro in US dollars: the currency named first is the one being priced. On November 11, 2026 the ECB’s reference rate was $1.1127.
Is a strong dollar good or bad?
It depends who you are. It is good for Americans buying imports or traveling abroad and for countries selling to the US; it is bad for US exporters and for foreign governments and companies that borrowed in dollars.
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About the numbers
- The numbers on this page are recalculated from the data every night; the sources are listed at the end of the page.
- Euro foreign exchange reference rates: European Central Bank, euro foreign exchange reference rates, time series file eurofxref-hist.zip.
- This page explains a term. It is not investment advice.