How Currency Exchange Rates Work
A currency exchange rate is the price at which one currency can be converted into another. Exchange rates fluctuate continuously on the global foreign exchange (forex) market, the largest financial market in the world with over $7 trillion traded daily. Rates are influenced by interest rates set by central banks, inflation, political stability, economic performance, and market speculation.
The rates shown by this converter are mid-market rates — the midpoint between buy and sell prices. Banks and money transfer services typically charge a spread above this rate, so the actual rate you receive for a transaction will differ slightly.
Major World Currencies
Understanding the most commonly traded currencies helps you interpret exchange rate movements.
US Dollar (USD)
The world's primary reserve currency and the benchmark for most commodity prices. When the US Federal Reserve raises interest rates, the dollar typically strengthens against other currencies.
Euro (EUR)
The official currency of 20 EU member states and the second most traded currency globally. The EUR/USD pair is the most traded forex pair in the world.
Japanese Yen (JPY)
A major safe-haven currency often used in carry trades. The yen tends to strengthen during global economic uncertainty as investors unwind riskier positions.
Tips for Getting the Best Exchange Rate
The exchange rate you see here is the mid-market rate. To get the best deal when actually exchanging money:
Avoid airport and hotel exchange booths
These typically offer the worst rates, with spreads of 5–10% or more above the mid-market rate.
Use a specialist money transfer service
Services like Wise (formerly TransferWise) or Revolut offer rates very close to the mid-market rate for international transfers, often with low fixed fees.
Check the total cost, not just the rate
Always compare the final amount you receive after all fees are deducted, not just the headline exchange rate.