A conceptual explanation in the market of foreign exchange

The purpose of this article is the methodological development of some basic concepts of the foreign exchange market. These concepts are explained in sequence, beginning with the most basic of all definitions (the exchange rate), with the intention of explaining the financial and exchange equilibrium. First the concepts of depreciation (devaluation) and appreciation (revaluation) are associated with the external purchasing power of the Venezuelan Bolivar. Then, the simultaneous behavior between the two currencies involved in the exchange rate is established. Subsequently, the exchange and financial markets global equilibrium, both internal and external is established through the inclusion of interest rates. To conclude, and as a useful application, the convenience of this method is highlighted through a brief analysis explaining the behavior of the relationship Dollar/Euro during the economic crisis of the United States in 2008.