Glossary

Currency depreciation

A fall in the value of one currency in relation to another. A movement in floating exchange rates results in one unit of a currency buying fewer units of another currency, thus the value of the first currency has depreciated. For example, with a floating exchange rate, if last week £1 bought $1.50 and this week £1 buys $1.45, the value of the pound has depreciated relative to the dollar because you get less dollars for the same amount of pounds.

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