Currency Converter

An exchange rate is a relative price between two units of account, quoted as a pair in which the first currency is the base and the second the quote: EUR/USD at 1.09 means one euro buys 1.09 dollars. Because rates are ratios rather than absolute measures, any pair can be derived from two others through a common vehicle currency, which is exactly what this tool does by expressing every currency against the US dollar and then dividing. That cross-rate arithmetic is not merely a convenience; the dollar is on one side of the large majority of global turnover, so many minor pairs are genuinely traded as two dollar legs. Arbitrage keeps the triangle consistent within seconds. The rate you calculate and the rate you receive are different numbers. Published figures are usually mid-market rates, the midpoint between the best bid and best offer in the interbank market, and no retail customer transacts there. Retail providers add a spread that runs well under 0.5 percent at low-cost transfer services, roughly 1 to 3 percent through banks and card networks, and as much as 10 to 15 percent at airport bureaux, sometimes alongside a flat fee. Dynamic currency conversion at a foreign card terminal typically costs a further 3 to 7 percent and should be declined in favor of paying in the local currency. The rates in this calculator are fixed reference values for planning only; major pairs can move a full percent in a day, so confirm a live quote before any actual transaction.

For most of the twentieth century there was little to calculate, because rates barely moved. The Bretton Woods conference of July 1944, attended by delegates from 44 nations at Mount Washington in New Hampshire, established a system of par values in which member currencies were pegged within one percent of the US dollar, and the dollar in turn was convertible into gold at 35 dollars per fine ounce. Conversion under that regime was a matter of looking up a published parity rather than tracking a market. The system unwound when President Richard Nixon suspended dollar convertibility into gold on 15 August 1971. The Smithsonian Agreement of December 1971 tried to restore fixed parities at realigned levels but collapsed by March 1973, and the Jamaica Accords of 1976 amended the International Monetary Fund's Articles of Agreement to legalize the floating rates that had already arrived. Continuous quotation followed the technology: Reuters launched its Monitor Dealing screen service in 1981, and electronic broking platforms in the early 1990s turned quoting into a near-continuous stream. ISO 4217, first published in 1978, supplied the three-letter codes such as USD, EUR and JPY that make automated conversion tables possible, and the Bank for International Settlements has measured the resulting market in its Triennial Central Bank Survey since 1989, most recently reporting daily turnover in the trillions of dollars.