Term
Floating exchange rate
A system where the market sets the price of the currency through buying and selling, instead of a government fixing it. Mexico has had one since 1994.
In pesos: Nobody decides each morning that the dollar is worth 18.40: millions of orders from companies, banks and travelers do.
Where to go deeper
1/4 5 min Read What it means when the peso weakens A beginner's guide to how the peso-dollar exchange rate works: who moves it, why it swings, and what it means for your money.More terms on the same topic
Educational content only: not financial, investment or tax advice. The numbers are examples to understand the idea, not a forecast or a recommendation.