foreign exchange

American  

[fawr-in iks-cheynj, for-] / ˈfɔr ɪn ɪksˈtʃeɪndʒ, ˈfɒr- /

noun

1. commercial paper drawn on a person or corporation in a foreign nation. FX

2. the process of balancing accounts in commercial transactions between business organizations of different nations. FX

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foreign exchange British  

noun

1. the system by which one currency is converted into another, enabling international transactions to take place without the physical transportation of gold

2. foreign bills and currencies

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foreign exchange Cultural  

1. The ways in which debts between two nations that use different currencies are paid. Foreign exchange rates can have an important effect on a nation's economy, because the value of its currency in other countries affects the cost of both imported and exported goods and services. (See balance of payments.)

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Etymology

Origin of foreign exchange

First recorded in 1685–95

Example Sentences

Following the data release, China’s foreign exchange regulator attributed the increase to a valuation effect, driven by a fluctuating U.S. dollar and gains in global financial asset prices.

From The Wall Street Journal • Jun. 7, 2026

The share of gold in total official foreign reserves – comprising both foreign exchange and gold holdings – had increased to 27% at the end of 2025, moving ahead of U.S.

From MarketWatch • Jun. 2, 2026

In that ocean of daily foreign exchange activity, approximately 85% of all transactions involve the dollar on at least one side.

From Barron's • May 27, 2026

In foreign exchange markets, Asian currencies consolidated in thin trade after holidays in the U.S. and the U.K.

From The Wall Street Journal • May 26, 2026

“Trying to pretend he's a foreign exchange student living in our house, like he always is.”

From "Starfish" by Akemi Dawn Bowman

Related Words

• convertibility