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General TradingF
Floating Exchange Rate
A floating exchange rate is a regime where a currency's value is determined by supply and demand in the foreign exchange market without direct government intervention. Most major currencies, including the USD, EUR, and GBP, operate under a floating exchange rate system.
Example
“The British pound operates under a floating exchange rate system, so when the UK voted for Brexit in 2016, GBP/USD dropped from 1.50 to 1.33 overnight as market forces repriced the currency.”