Floating currency
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A floating currency is a currency that uses a floating exchange rate as its exchange rate regime. A floating currency is contrasted with a fixed currency.
In the modern world, the majority of the world's currencies are floating, including the most widely traded currencies: the United States dollar, the Japanese yen, the euro, the British pound and the Australian dollar. From 1946 to the early 1970s, the Bretton Woods system made fixed currencies the norm; however, in 1971, the United States government abandoned the gold standard, so that the US dollar was no longer a fixed currency, and most of the world's currencies followed suit.
A floating currency is one where targets other than the exchange rate itself are used to administer monetary policy. See open market operations.
The People's Republic of China recently repegged their currency, which was formerly affixed to the US dollar.
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