What is an exchange rate?

Currency Conversion Rates Explained

What is an exchange rate?

Even if you’re not looking to trade currency on the foreign exchange market, it’s important to understand currency conversion rates.

This is useful when you are planning a holiday abroad; Knowledge of currency rates can help you save money and help you to plan ahead.

In simple terms, an exchange rate is simply a price, which can be calculated:

exchange rate = 1/exchange rate

Example, if 1 US dollar is equal to 117 Japanese yen, you could calculate the exchange rate as:

1/117 = .00854

Alternatively, if you know the exchange rate of USD to yen is .00854:

1/.00854 = 117

Therefore, you can calculate that 1 USD can buy 117 yen.

To see the latest currency exchange rates use our currency calculator to get an overview on what the current exchange rates are, for an exact price give us a call and we can confirm an exchange rate for you.

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