How to Read Currency Conversion Results

 

How Do I Use the Converter?

  • Use the Currency Converter to calculate exchange rates for any day back to January, 1990. Add percentages to get more realistic rates like what you’re charged by banks or credit card companies.
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  • Type values in either side of the converter, depending on if you have money to exchange or if you want money to purchase items costing a certain amount.

Examples

These examples show some different scenarios using typical rates. These examples apply to US residents needing to exchange euros.

I want to know the rate quoted in the media.

  • The "Interbank" rate is the official rate.

    Example Image

I’m buying something with a credit card. What will it cost?

  • I’m in Europe and want to buy something that costs 500 euros. How much will it cost me in US dollars?
  • I made a 500 euro purchase by credit card over the Internet. How much will the bill be in US dollars?


    Example

I want a certain amount of cash. How much will it cost me?

  • I want 500 euros in cash. How many US dollars will the bank charge me?
  • I want to send 500 euros. How many US dollars will I need? (Not including bank service charges.)

I have some foreign cash left over. How much will I get for it?

  • I have 500 euros left over from my trip. How many US dollars will the bank give me?

I made a credit card transaction in the past.  How much did it cost me?

  • When I was in Europe, I bought something that cost 500 euros on July 17, 2009.
  • I made a 500 euro purchase by credit card over the Internet on July 17, 2009.

 

How Do I Choose the Rate that Applies to Me?

Use the RATE pull-down of the Currency Converter to choose an exchange rate closer to the retail rates you’ll actually be paying:

  • Rate Pulldown
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  • 1. Interbank rates are the official rates, with a margin close to zero. These are the "official" rates quoted in the media, such as The Wall Street Journal. They typically reflect the market rates for transactions of US $1 million or more when banks trade between themselves or with their very large clients.

    For the smaller amounts exchanged in a retail setting, banks, credit cards and exchange agencies charge commissions to convert currencies. These retail rates add commissions of 1 to 10 percent or more.
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  • 2. Credit cards typically add 2% (for the major currencies; more for other currencies).
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  • 3. Banks typically add 4% if you are converting cash (for the major currencies; more for other currencies).
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  • 4. Pick your own rate if you know it. Retail rates vary widely between payment systems, countries and banks, so we encourage you to ask about the rates your financial institution is actually charging you.

 

What are Bid and Ask, Sell and Buy?

When you convert currency, you sell one currency to buy another. Your financial institution charges you a different rate if you are selling a currency (the bid, or sell, rate) or buying a currency (the ask, or buy, rate).

You can see these two types of rates in the lower details section of the Currency Converter:

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  • The Bid (or Sell) rate is the lower number. You will receive fewer dollars when selling your euros. (This is the number you see in the right field of the converter.)
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  • The Ask (or Buy) rate is the higher number. It will cost you more dollars when buying euros.

 

How Are OANDA's Rates Calculated?

For the major currencies of the top seven industrial countries (G7), our rates are based on tens of thousands of different price points, collected every few seconds, 24 hours a day, 365 days a year. We collect these rates from live data suppliers, filter them to remove false prices and validate the data, and use the filtered data to compute interbank market rates.

The period of time over which the average bid/ask currency price is taken depends on the data available for the particular currency. When possible, we take the average of prices over the last 24 hours and update these rates every day at 22:00 UTC (Coordinated Universal Time).

Prices for the currencies of some emerging market countries are perhaps published once per day or even less, resulting in only a few price points each week for these currencies.

Note: You may see the message in the converter's Details section, "Estimated price based on daily US dollar rates." This message is displayed for currency pairs where relatively little data is available, and means that the exchange rate for the converted currencies was computed from cross rates with the US dollar.

How do rates differ from the old FXConverter?

The Currency Converter shows the bid rate in the right field when you enter a value in the left field. This is different from OANDA's old FXConverter, which shows the ask rate.

To see the ask rate in the new converter, simply go to the lower details section and look for the relevant "Buying" entry.

 

See also

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