Steps to Calculating Exchange Rates

Exchange rate tells us about the value differences in two different currencies. These rates are never constant, they keep fluctuating with time as both of the currencies in currency pairs (like Euro/ USD) are exchanged. This follows the simple rule of demand and supply, and the rates follow the gold and oil trends in the market.

However, the exchange rate of a currency pair in the market is usually different from the amount you will get by the banks. Here is a brief overview of the exchange rates that you can take a look on to know a bit more about the topic.

Exchange Rates in The Market

Companies and traders keep on trading between different currency pairs throughout the day. You must give a currency in order to get the other one. For example for Euro/ USD conversion, you must give an appropriate amount in Euros to get the amount of dollars you need.

Usually, these exchange rates can be found on the websites of forex brokers.

Understanding an Exchange Rate

Reading and understanding a currency pair’s exchange rate is not difficult at all. For example, if it is a Euro/ USD trade, and the exchange rate is 1.3, that means it will cost 1.3 USD to get 1 Euro.

In short, the exchange rate mentions how much of the second currency is needed to buy 1 unit of the first currency. To revert this conversion, you can simply get the answer to 1/ exchange rate, and you will be good.

In the forex markets, there are many strong currency pairs that are preferred by the traders for certain reasons. The currency pairs like Euro/ USD provide the traders with more profit opportunities. So, after reading this, you can now tell how much is 100 euros in us dollars.