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