What term describes a fall in the value of one currency compared to another in a floating exchange rate system?

In a floating exchange rate system, a fall in the value of one currency compared to another is termed depreciation. This occurs due to market forces, such as supply and demand, where a decrease in demand for a currency or an increase in supply can lead to a drop in its value relative to other currencies.

Depreciation contrasts with devaluation, which refers to a deliberate downward adjustment of a currency's value, typically within a fixed or managed exchange rate system, implemented by a government or central bank. Appreciation, on the other hand, indicates an increase in a currency’s value relative to another currency, while revaluation is a formal increase in the value of a currency in a fixed exchange rate system. Therefore, the correct term for a voluntary fall in currency value within a floating exchange system is indeed depreciation.