Exchange Rate Converter

Complete Guide to Currency Exchange Rates

Understanding how exchange rates work is essential for international travel, business, and investing. Learn how currencies are valued and how to get the best rates for your money.

What Are Exchange Rates?

An exchange rate is the price of one currency expressed in terms of another. For example, if USD/EUR = 0.92, it means 1 US dollar equals 0.92 euros. Exchange rates fluctuate constantly based on supply and demand, economic indicators, political events, and central bank policies.

Types of Exchange Rates

Spot Rate

The current market price for immediate currency exchange. This is what our converter uses.

Forward Rate

A rate agreed today for a currency exchange at a future date. Used by businesses to hedge risk.

Mid-Market Rate

The midpoint between buy and sell rates. The "true" exchange rate before fees are added.

Retail Rate

The rate offered to consumers, which includes a markup from the mid-market rate.

Factors Affecting Exchange Rates

Interest Rates: Higher rates attract foreign capital, strengthening the currency
Inflation: Lower inflation typically leads to a stronger currency
Trade Balance: Countries with trade surpluses see higher demand for their currency
Political Stability: Uncertainty weakens a currency as investors seek safer assets
Central Bank Policy: Quantitative easing or rate changes directly impact currency value
Economic Growth: Strong GDP growth attracts investment and strengthens the currency

Tips for Getting Better Exchange Rates

Avoid airport kiosks: They typically offer the worst rates with high fees
Use no-fee debit cards: Cards like Wise or Revolut offer near mid-market rates
Pay in local currency: Always decline "Dynamic Currency Conversion" when offered
Compare services: Banks, online services, and local exchanges have different rates
Time your conversion: Monitor rates and exchange when they're favorable

Frequently Asked Questions

How often do exchange rates change?

In the forex market, rates change constantly—every second during trading hours. Our converter updates every 5 minutes to balance accuracy with API efficiency.

What is the spread?

The spread is the difference between the buy (bid) and sell (ask) price. Banks and exchange services profit from this margin. A tight spread means you're getting a better deal.

Why does my bank give a different rate?

Banks add a markup (typically 2-5%) to the mid-market rate. They may also charge flat fees. Our converter shows the mid-market rate so you can calculate the true cost of any exchange service.

What is a "strong" vs "weak" currency?

These terms are relative. A currency is "strong" when it gains value against others, making imports cheaper but exports more expensive. "Weak" currencies boost exports but increase import costs.

How can I predict exchange rate movements?

Currency prediction is extremely difficult. Even experts often get it wrong. Focus on hedging strategies rather than speculation. For travel, consider buying some currency in advance if rates are favorable.