The exchange rate is the price of one currency in relation to another.
Changes in exchange rates have an impact on the prices of imports into the UK and the price of exports from the UK.
Exchange rates change 24/7 on 'forex' markets around the world.
Currency data from the BBC. Details here.
Factors which determine the exchange rate. Details here.
If the pound gets stronger against another currency (eg moving from £1.00 : $1.50 to £1.00 : $2.00) we say that it has appreciated in value.
A movement the other way would be a depreciation in the value of the £.
If the pound appreciates in value:
UK exports become more expensive because overseas customers have to give up more of their currency to buy the same amount of pounds.
UK imports become cheaper because the pound will buy more.
If the pound depreciates in value:
UK imports become more expensive whilst exports become more competitive in international markets.
Brexit:
