Finance• 2024-12-28
Currency Exchange 101: Understanding Rates
How do exchange rates work? Learn about mid-market rates, buying/selling spreads, and how to get the best deal.
What drives exchange rates?
Exchange rates are determined by the foreign exchange market (Forex), influenced by interest rates, economic stability, and geopolitical events. The rates fluctuate every second during trading hours.
Mid-Market Rate vs. Retail Rate
The rate you see on Google or our Currency Converter is usually the "mid-market" rate. Banks and exchange bureaus charge a "spread"—a markup on this rate—which is how they make money. Always compare the spread before exchanging large sums.
Use our tool to check the live mid-market rate as a benchmark before traveling or making international transfers.
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