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Currency Converter UsageFXConverter or 164 Currency Converter Results
Quick summary of understanding 164 Currency Converter results
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The most reliable exchange ratesFXConverter or 164 Currency Converter computes the conversion results from interbank market rates which generally reflect the exchange rates for transactions of US $1 million or more. These market rates are based on up to 10,000 different price points per major currency collected each day from live market data suppliers. We receive, Tenfore Data, filtered and supplied by Olsen Data, and store this data 24 hours a day, 365 days a year. We then update the data used for our currency services daily at 23:00 MET (Middle European Time) with average prices from the day to give you accurate and timely exchange rates.Currency price: bid and askPlayers in the foreign exchange market, such as banks and corporations, buy and sell currencies openly. Currency prices are expressed in terms of "bid" and "ask." Bid is the price at which buyers offer to buy currencies from sellers. Ask is the price at which sellers offer currencies to buyers. Ask prices are usually slightly higher than bid prices, reflecting the profit margins of sellers. The bid and ask prices we receive from our data sources are interbank prices, and not retail exchange prices as you might receive from your bank or an exchange agency. Interbank prices reflect the market rates for transactions of US $1 million or more, while retail prices reflect commissions and special charges that a bank or exchange agency demands to convert currencies.Currency margin rates: interbank, cash, credit card, ...The prices quoted by the 164 Currency Converter or the "Cheat Sheet for Travelers" are based on interbank market rates and generally reflect the exchange rates for transactions of US $1 million or more. These are the "official" rates quoted in the media, such as The Wall Street Journal. Retail spreads (the difference between the buy and sell prices) for smaller amounts are not reflected in these interbank prices since they vary among payment systems, countries and banks. These retail rates, which are used by credit cards or cash exchanges in banks or other exchange services, usually include 1 to 10 percent margins on the top of the interbank rates. For example, if the interbank rate for 1 Euro converted to US Dollar is $1.1919, typically you need to present approximately $119.19 in a bank to get 100 Euro.If you go to a bank in your home country, you usually have to pay more of your home currency to get foreign currency than you will receive of your home currency, if you return the foreign currency. This results in the two exchange rates shown in the margin result. Because these retail rates vary so much in every place, we cannot advise you where to go at any given moment to change currencies. You can usually find out such information from your local bank, travel guides, or people who have visited the place you are heading for.How to choose the rate typeBe sure you have chosen the destination currency and your home currency correctly. You home currency is what you would present in a bank to get your destination currency.If you need the official rates, choose the "interbank rate"; If you are going to mostly use your credit cards while you travel and your destination and home currencies are among the major currencies, you may choose the typical credit card rate which includes a 2% margin on the top of the interbank rate;If you are going to mostly use cash while you travel and your destination and home currencies are among the major currencies, you may choose the typical cash rate which includes a 4 to 6% margin on the top of the interbank rate. This is usually close to the rate you get from a bank for major currencies. Less frequently traded currencies are usually sold with higher margins. If you believe the exchange rates you get during your travel were/are not close to the typical rates we suggest above, then choose a different margin: "Interbank +1%" or "Interbank + 4%", etc.How we calculate the exchange rateTo provide you with an accurate exchange rate, we take an average of all filtered bid/ask currency prices (which we collect from live data suppliers) over a period of time. This average is the "median price" (see Example conversion results). We take the average of the bid and the ask of the median price to compute the current exchange rate.Availability of currency pricesThe period of time over which the average bid/ask currency price is taken depends on the availability of data for the particular currency. When possible we take the average of prices over the last 24 hours, but sometimes we must take the average of prices for a longer period of time. For example, prices for currencies of the top seven industrial countries (G7) are updated almost every minute while the markets are open, resulting in thousands of price points each day for these currencies. In contrast, prices for currencies of emerging market countries are perhaps published once per day or even less, resulting in only a few price points each week for these currencies.High-quality data: price filteringWe receive live, quoted prices from our suppliers in raw form and filter them with innovative filtering processes to remove false prices and validate the data. These filtering processes give us the highest-quality high frequency financial data. See "The Importance of High Frequency Data" in our financial research approach on the Web site of our parent company Olsen & Associates for more information on our high-quality data.Example conversion resultsHere is an example of a conversion of 1 US Dollars to Euro.Note: The terms displayed below (for example, "Median price was..." ) do not appear in all currency conversion results. 
The following table explains the terms used in this example conversion.
Note: The message, "Estimated price based on daily US dollar rates" is displayed for currencies for which relatively few data are available. This message means that the exchange rate for the converted currencies was computed from dollar rates. |
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