I. INTRODUCTION Objective The general objectives of this study are to describe recent trade problems and examine why these problems are related to and influenced by exchange rates. The study first examines the exchange rate and how it is determined. The study will explore, in detail, the agencies that determine these rates. This study will also present the pros and cons of different prices of goods and services in different countries. Specifically, this document: (1) defines recent trade issues and how they are affected by the exchange rate; (2) describes the measures taken within the agencies that determine exchange rates; (3) examines the impact of these rates, both positive and positive. bad;(4) analyzes the costs of similar goods in U.S. and foreign markets;(5) discusses the pros and cons of the exchange rate and how it affects trade;(6) examines various exchange rate systems: floating, fixed, and dirty floating. Limitations of the Study The topics of exchange rate and trade both have a variety of factors that cause changes. As with any study that attempts to explore current developments in the economy, it is difficult to keep information up to date. It is also virtually impossible to report on the status of every single government involved in the foreign exchange market. One of the limitations of this study is that it reports updated currency values ​​by choosing a sample of governments that accurately represents the world economy. Therefore, the solution was to use statistical data from journal articles and books written in the previous year. Furthermore, the countries chosen for the study are believed to play a significant role in the exchange rate market. Paper Plan This study first examines the relationship between the exchange rate and trade. This exam includes a definition of the exchange rate, an explanation of how the rate is determined, and a detailed description of the agencies involved in determining the exchange rate, including the U.S. Treasury and the Federal Reserve Bank (the Fed). The next section defines and evaluates three different exchange rate systems: the fixed, the variable and the dirty variable. The third section defines trade problems, how they are affected by the exchange rate and also how trade is affected by the former...... middle of paper ......and there have been system changes in the United States, from Bretton Woods to the current variable rate; and there are different systems implemented around the world, the fact remains that the exchange rate is the basis for an incredible amount of financial decisions, including trade. Economists will debate which system is best, but there is no doubt that whatever system is chosen will still have to be able to withstand constant fluctuations in supply and demand. In recent years, the world has seen supposedly stable markets collapse after their currency overvalued. Brazil and Russia are just some of the countries affected: Mexico, Asia, Thailand, Malaysia, the Philippines and Indonesia are other countries that have had to review their exchange rate systems. Right now the dollar remains strong. However, the plight of these countries not only creates a domestic crisis, but creates a small amount of panic around the world. Cautious investors get worried and move their investments quickly. This movement creates a domino effect through the exchange rate, interest rates and trade balances between countries.