The term " fx currency " is a financial term for foreign exchange currency. Exchange rates on foreign currency are simply given shorthand tags sometimes by brokers and commetntators. For example forex rate, FX rate, FX exchange all relate to the Foreign exchange markets.
The exchange rates between any two currencies denotes the value of one currency against another. An exchange rate of $1.56 to the pound means that for £1, the equivalent US currency amount is $1.56 (or another way, every $1 is worth £0.64
Why is FX currency important?
When you go on holiday, the fx currency rate between countries that have different currencies ultimately governs the amount of foreign currency you have in your hand to spend.
For example, if you have an exchange rate of $2 to £1 - for every £100 you change, you get $200 in your pocket. If the fx currency rate changes so that for $1.6 you get £1, for every £100 you change, you only now get $160 in your pocket - $40 less for you to spend - even though the price of nothing in the shops changes by that much! Now you can probably see the importance.
Why get fx currency before you go
You are more likely to get better exchange rates on your currency if you buy before you go. It also means you can choose when to buy (e.g the US$ example above that changed over a 3 week period in 2008). Don't rely on credit cards to provide great rates - read our article on credit card currency. The worst place to exchange money is the airport!
Who gives the best currency rates?
In all honesty it fluctuates as to who has the best rates and commission free deals. High street booths will nearly always have competitive rates, but you may be slapped with a nice commission charge - which they market as free buyback - but who returns with loads of foreign exchange!!!