Currency Converter Guide: Exchange Rates, Conversions, and Financial Calculations
How Exchange Rates Work
An exchange rate is the price of one currency in terms of another. If the USD/EUR rate is 0.92, it means one US dollar buys 0.92 euros. Exchange rates fluctuate continuously based on supply and demand in the foreign exchange (forex) market — the world's largest financial market, trading over $7 trillion per day.
Major factors that move exchange rates: interest rate differentials between countries, inflation rates, economic growth data, geopolitical events, central bank interventions, and market sentiment.
Using the Converter
Choose the currency you're converting from using the dropdown. Most converters include 150+ currencies.
Type the amount you want to convert. You can enter any decimal amount.
Choose the currency you're converting to.
The converted amount appears using the current mid-market exchange rate. The rate and last-updated timestamp are shown below the result.
Types of Exchange Rates
- Mid-market rate — the midpoint between the buying (bid) and selling (ask) rates. This is the rate you see on Google, XE.com, and our tool. It's the "true" rate but not what banks and exchange bureaus use.
- Buy rate (bid) — the rate at which a bank buys foreign currency from you. Always lower than mid-market.
- Sell rate (ask) — the rate at which a bank sells foreign currency to you. Always higher than mid-market.
- Interbank rate — the rate banks use when trading with each other in large volumes. Very close to mid-market; never available to consumers directly.
Fees and the Real Cost
The exchange rate you see in a converter is rarely the rate you get in practice. Fees and margins are added at every step:
- Bank wire transfers — banks typically mark up the exchange rate by 1–3% plus a fixed fee of $15–$50 per transfer.
- Credit cards abroad — usually 1–3% foreign transaction fee on top of a marked-up rate. Some travel cards (Charles Schwab, Wise) charge no foreign transaction fees.
- Airport exchange bureaus — typically the worst rates, 5–15% spread from mid-market.
- Wise (formerly TransferWise) — uses mid-market rate and charges a transparent, low fee. Often the best option for international transfers.
Watch out for "0% commission" signs at exchange bureaus. They make their money on the exchange rate spread, not a separate commission. Compare the offered rate against mid-market before accepting.
Tips for Travelers and Businesses
Travelers
- Use a no-foreign-transaction-fee credit card for purchases abroad
- Withdraw local cash from ATMs using your debit card — ATM rates are usually close to mid-market
- Decline "dynamic currency conversion" at ATMs and card terminals — it charges you an additional markup to pay in your home currency
Businesses
- Use forward contracts or options to lock in exchange rates for future payments if you have predictable foreign currency obligations
- Invoice in your own currency to transfer exchange rate risk to the counterparty
- Use multi-currency accounts (Wise Business, Airwallex) for companies that regularly pay or receive in foreign currencies