Investors all around the world trade huge amounts of foreign currency every day. The rate at which investors swap currencies also determines what rate people get at the bank, post office or foreign exchanges.

Many people don't think about exchange rates until it's time to swap money for a foreign holiday. When you travel abroad, things will be more expensive if the pound buys less of the local currency.

However, a fall in the pound affects household finances too.

If the pound is worth less, the cost of importing goods from overseas goes up.

For example, as oil is priced in dollars a weak pound can make filling up your car with petrol more expensive. Gas is also priced in dollars.

Technology goods, like iPhones, that are made abroad, may get more expensive in UK shops. Even things that are made in the UK but from parts that are bought abroad can get much more expensive

Investors all around the world trade huge amounts of foreign currency every day. The rate at which investors swap currencies also determines what rate people get at the bank, post office or foreign exchanges.

Many people don't think about exchange rates until it's time to swap money for a foreign holiday. When you travel abroad, things will be more expensive if the pound buys less of the local currency.

However, a fall in the pound affects household finances too.

If the pound is worth less, the cost of importing goods from overseas goes up.

For example, as oil is priced in dollars a weak pound can make filling up your car with petrol more expensive. Gas is also priced in dollars.

Technology goods, like iPhones, that are made abroad, may get more expensive in UK shops. Even things that are made in the UK but from parts that are bought abroad can get much more expensive