Do you wish to receive the best exchange rates on the market when you change your money?

We present to you the exchange rates currently on the market

The question is, how do you maximize the amount of foreign currency you wish to receive in exchange for you local money.
 If you do any of the below, it might be beneficial to be aware of the exchangerates for foreign currencies.

• When buy something on the internet in a foreign country 
• Travel to a foreign country 
• Send cash to someone abroad
• Transfer money to someones bankaccount abroad
• Transfer money to a company abroad
• A payment to a company abroad

Understanding the currency exchange market may have an impact on your ecomomy. By knowing where you may get the best currency exchangerate you can save money.

For a start there are different names for the rates you get when you change your money

The meaning of the names are all the same, it is just they have different names:

• Currency rates
• Exchange rates
• Currency exchange rates

They all refer to the exchange rates that shows you the amount of foreign currency you get for your own local currency.

In travel, the exchange rate refers to how much money in the foreign currency you will get for you local currency.
 Say if your country is Sweden, and you wish to travel to Germany, the exchange rates shows you many Euros you will get for your SEK.

 

What is exchange rate?

An exchange rate, currency rate or currency exchange rates, is the relative value between two currencies. Basically "the exchange rates shows you the amount of foreign currency you get for your currency.”

The exchange rate when buying a currency

When you are going to travel you might get some of the foreign currency before you get to the country. Then you look at the exchange rate for buying the currency.

The exchange rate refers to how much money in the foreign currency you will get for you local currency. All currencies have an exchange rate against each other. The exchange rate for the EURO stated in Swedish kronor is generally stated as SEK / EUR, which shows how many Swedish kronor are to be paid for one EURO.
 
 Alas if your country is Sweden, and you wish to travel to Germany, the selling rate at an exchange place, shows the exchange rate to you of how many SEK you need to pay to buy one Euro.
 

The exchange rate when selling a currency

When you come back to your country and still have some foreign money, you might wish to change them back to your local currency.

If have some Euro you wish to change back to SEK. Then you need to look at the selling rates.

Alas if your country is Sweden, and you wish return your spare Euros from your travel to Germany, the buying rate at an exchange place, shows the exchange rate to you of how many SEK you will get back from one of you Euros.

Calculate the Rate

Calculating an exchange rate is simple but can change on a day-to-day basis. As an example: At en exchangeoffice the Euro selling exchange rate is 0.825835 to 1 US Dollar according to the currency market. This means that you can buy 1 US Dollar for 0.825835 Euros , or in other words 1 US Dollar is worth 0.825835 Euros.  

In order to find out how much one Euro is worth in US dollars, divide 1 (as in one-dollar) by 0.825835 to calculate how many US dollars one Euro is worth: $1.21. Therefore: 

• 1 USD = 0.825835 Euros
• 1 Euro = 1.21090 USD

Bank and International Transaction Fees for credit cards or debit cards

You may have heard of credit cards or debit cards with "no international transaction fees." Do these have any bearing on foreign exchange rates?  

Banks assist to process purchases made on debit or credit cards while we are abroad. However, many also choose to charge an additional fee, sometimes called an "international transaction fee", for the transaction. This is usually charged as a percentage of the transaction fee.

The international transaction fee is not considered part of an exchange rate. To get the best rates while abroad, be sure to always use credit and debit cards that do not charge an international transaction fee. Otherwise be aware of the international transaction fee and add it to the costs when changing money.

The exchange rate set in a country can be either fixed or floating

The exchange rate can be fixed or variable (also called floating).

What then is the difference between a fixed and a floating (floating) exchange rate?

• A fixed exchange rate means that two countries have decided that the exchange rate between their currencies should be at a fixed level.

• A floating exchange rate means the opposite, ie the exchange rate changes freely according to market movements.

An explanation of the movement of a currency

 There are four terms used to describe changes in a currency.

• Depreciation: Means that the currency falls in value as a result of demand and supply in the market.
• Appreciation: Means that the currency rises in value as a result of demand and supply in the market.
• Devaluation: Means that the official exchange rate of a currency is written down by a political decision.
• Revaluation: Means that a currency's official exchange rate is written up by a political decision.

Have you ever wondered who sets the exchange rates for your?

Yes indeed, who sets the exchange rates for your when you wish to change your money to a foreign currency? Every currency exchange place sets its on exchange rates.

 Exchange rates are primarily governed by the demand for a country's currency and are determined in the foreign exchange market.
 
 Exchange rates may change day to day, still the changes are often very small with only a little difference on the values. For a major change to occur on a currencies value, a major economic factors needs to happen, like
 

• A countries political situation
   
   Political instability in a country may make it difficult to value assets in the future, as unexpected and unpredictable events in the country can lead to the value of assets falling or increasing. Due to this, the willingness to invest in the country may decrease, which weakens the exchange rate of the currency.
   
   For example:
   When Greece was on the verge of an economic meltdown, the Euro weakened in value. In turn, the American Dollar grew in strength, giving Americans more buying power in the European Economic Area.
   
• Interventions from the central bank of the country
   
   Central banks can affect the exchange rate in the short term. Partly by lowering or raising the interest rate but also through interventions. Depending on whether the intention is to strengthen or weaken the exchange rate, the Central Bank can buy or sell foreign currency, which is done by the Central Bank's foreign exchange reserve decreasing or increasing.
   
   For example:
   When the Swedish Central bank wants the Swedish krona to strengthen against the Japanese yen, the Japanese yen is sold to buy Swedish kronor.
    
• Foreign trading
   
   The value of a country's exports and imports of goods and services is called the current account. It is not the current account balance itself that affects the exchange rate, but the changes in the current account. Decreasing exports may mean that the currency may weaken in the future, and vice versa.
   
   For example:
   When countries that has had very little export but high import changes the balance, and start to export more their currency will strenghten.
   
   

• Economic growth
   
   A country with high growth often sees the value of its currency increase as investors will buy its goods and services. And they will need more of its currency to do so.
   
   An other aspect is when foreign players become more interested in investing in the country, which leads to the country's financial balance being positive. When the capital inflow is greater than the capital that flows out of the country, the demand for the country's currency increases, which strengthens the currency.
   
   For example:
   Formerly underdevelops countries have for many years attracted foreign capital to invest in their countries, and hence the countries currency has strengthened as there is a demand for the currency.
   
   

• Business decisions
   
  A relatively big business may have impacts on international exchange rates when there revenues from foreign trade changes.
   
   For example:
   A major corporation desides to bring home to their country the revenues from foreign countries. If the balance of buying and selling the currency is changed by the action, it will affect the exchange rates.