In the foreign exchange market, the dollar, which is considered a medium of exchange, becomes a commodity that has a price. To put it briefly, the exchange rate is the domestic money price of foreign money, On any given day, nationally. In mid-1989, $1 equaled 140 yen. This relationshihp is called the rate of exchange. However, there is a foreign exchange market where currencies of different sovereign nations are transacted with one anther. This market determines the price through supply and demand.