How to convert currencies and how to calculate the exchange rate

How to convert currencies and how to calculate the exchange rate

Currency exchange is very popular among international travelers and investors. Although currency exchange rates are readily available these days, reading and calculating these rates can be a challenge for the non-financial tech-savvy.

To convert currencies mathematically, let's take a closer look at how to find and read currency exchange rates, taking into account some important tips before making the conversion that we will provide you in this article. Follow us...

Why is the method of currency conversion important?

Currency conversion provides many important advantages, one of the most important of which is the fluctuation of currency pairs all the time due to the various economic factors in the forex market, which can be viewed through the economic calendar, including supply and demand and various economic indicators, as these fluctuations occur constantly and changes reach sometimes to fractions of a currency's value.

If you don't want to manually convert currencies, Google has provided a great tool that allows you to convert any currency in the world at its current exchange rate. It is reported that this tool has been developed by Google itself.

Exchange rates can be found in many different places, from banks to currency exchange sites such as (xe.com) Travelers who want to exchange currencies in an easy way can find rates at airports or local banks, while international investors who trade in The forex market can look to their trading platform for real-time information.

Quotes are always given in pairs, because currency values are in proportion to each other and it is common for the most popular currency pair to be EUR/USD, which is the number of dollars needed to buy one euro, given the US dollar's status as the reserve currency in many of the world's central banks.

How do I calculate currency conversion?

Converting currencies between different pairs is important for people, especially those who travel a lot and move between different regions, and for those who carry out international business operations, the process of currency conversion is associated with many important terms, among them the terms selling price and buying price.

The selling price is defined as the value in the local currency that the bank takes when transferring a foreign currency to the other party, while the purchase price is the value in the local currency that the bank offers to the other party when converting the foreign currency. The selling price is usually higher than the purchase price.

Here are some ways to convert between currencies:

1. Banks and Banks: Banks provide currency exchange services to customers and investors, and individuals can make transfers at bank branches or through online banking services.

2. Money transfer companies: They are companies specialized in transferring money between countries at competitive prices and fast service.

3. Forex platforms: allow investors to trade in the foreign exchange market and convert currencies based on daily fluctuations in exchange rates.

4. Automated Teller Machines: Some ATMs provide currency exchange services at fast and convenient rates for travelers.

It should be noted that currency exchange rates are affected by economic, political and financial factors, and it is advised to research and compare prices before making a transfer to get the best deal.

How to Read and Calculate Currency Exchange Rates - currency converter 2023

What are the most important global currencies traded?

There are many world currencies in circulation, but there are some currencies that enjoy great importance and wide fame in the global currency market (Forex) and international trade. Here is a list of the most important traded global currencies:

• US Dollar (USD): The US dollar is one of the most important currencies in the world. It is a major reserve currency and is widely used in international trade.

• The Euro (EUR): It is used in the European Union and is the second largest reserve currency in the world.

• Japanese Yen (JPY): The Japanese Yen is one of the largest traded currencies in Asia and is very popular in the global market.

• Sterling Pound (GBP): It is used in the United Kingdom and is considered an important currency for international trade and monetary reserves.

• Canadian dollar (CAD): It is used in Canada and is considered one of the widely traded currencies in the commodity and oil markets.

• Swiss Franc (CHF): It is known as a safe haven currency and is used in the international money market.

• Australian dollar (AUD): used in Australia and affected by commodity and metal prices.

• New Zealand Dollar (NZD): Used in New Zealand and considered an emerging currency.

These are some of the world's most important traded currencies, and these currencies are considered a base for trading and holding value globally due to their wide use in international business and financial operations.

What is the best account type of currency conversion?

It is preferable to use the decimal system as a means of converting currencies mathematically, as it is suitable for financial and monetary calculations. The decimal system can represent values ranging from one to three decimal places, and this facilitates accurate currency conversion.

Which currency exchange method is the safest?

Currency conversion can be done one-to-one in exchange shops and banks, and this type of transfer is usually safe and done with high accuracy and security, as the broker handles the transfer procedures accurately and quickly.

By using the decimal system and relying on exchange shops and banks, individuals and travelers can transfer with confidence and ease without worrying about financial and cash transfers.