Exchange Rate
In short
The price at which one country's money can be swapped for another country's money.
In plain words
It tells you how much your money is worth in a different place. If the rate changes, your money might buy more or less than before.
A simple example
If the exchange rate for the Pound to the Euro is 1.20, you get 1.20 Euros for every 1 Pound you spend.
Why it matters
It affects the cost of holiday shopping and how much businesses pay for goods from abroad. It also influences how much expensive imports, like petrol, cost at the pump.
Easy to mix up
Do not confuse this with an interest rate, which is the cost of borrowing money.