Question 1

What is an exchange rate?

Accepted Answer

It's the price of one currency in another: how many units of one you get for one unit of the other. If 1 USD = 0.92 EUR, then 250 USD is worth 250 × 0.92 = 230 EUR, and going back, 230 EUR ÷ 0.92 = 250 USD. Rates move constantly on the currency markets as supply and demand change.

Question 2

Why is the rate I get from my bank or card different?

Accepted Answer

The rate here is a reference rate, roughly the middle of the market. Banks, card issuers and money transfer services usually give you a less favourable rate than that (the difference is called the spread or margin), and some also charge a fixed or percentage fee. The rate can also have moved since these rates were published. To know exactly what you'll receive, check the quote from the service you're using before you pay.

Question 3

How often are the rates updated?

Accepted Answer

Once a day. The provider publishes a new set of reference rates daily, and the page shows the date and time they were published. Between updates the rates on this page stay the same, even though market rates keep moving.

Question 4

How are two non-dollar currencies converted?

Accepted Answer

Through the US dollar, because every rate is quoted against it. To turn euros into yen, the amount is divided by the euro rate (to get dollars) and multiplied by the yen rate. With example rates of 1 USD = 0.92 EUR and 1 USD = 150 JPY, 100 EUR = 100 ÷ 0.92 × 150 = 16,304 JPY. These are example rates, not current ones.

Question 5

Why are there no decimals for some currencies?

Accepted Answer

Each currency has its own usual number of decimal places. The Japanese yen and Korean won are normally shown without decimals, most currencies use two, and a few, such as the Kuwaiti dinar, use three. The converter rounds each result to the target currency's usual decimals.

Question 6

Can I use it for a money transfer or trading?

Accepted Answer

Use it as a quick reference only. It uses daily reference rates, not live prices, and doesn't include the spread or fees a provider charges, so it can't tell you the exact amount of a transfer or the price of a trade.