Floating currency

A floating currency is a currency that uses a floating exchange rate as its exchange rate regime. A floating currency is contrasted with a fixed currency.

Related Topics:
Currency - Floating exchange rate - Exchange rate regime - Fixed currency

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In the modern world, the majority of the world's currencies are floating, including the most widely traded currencies: the United States dollar, the Japanese yen, the euro and the British pound sterling. Prior to the 1970s, the Bretton Woods system made fixed currencies the norm; however, in 1973, the United States government abandoned the gold standard, so that the US dollar was no longer a fixed currency, and most of the world's currencies followed suit.

Related Topics:
United States - Dollar - Japan - Yen - Euro - British - Pound sterling - 1970s - Bretton Woods system - 1973 - Gold standard - US dollar

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A floating currency is one where targets other than the exchange rate itself are used to administer monetary policy. See open market operations.

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The People's Republic of China recently repegged their currency, which was formerly affixed to the US dollar.

Related Topics:
People's Republic of China - Repegged their currency - US dollar

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