How Exchange Rates Work
Exchange rates tell you how much one currency is worth in terms of another. They are set by supply and demand in the foreign exchange (forex) market and used by banks, businesses, and travelers for conversion.
What is an exchange rate?
An exchange rate is the price of one currency expressed in another. For example, if the USD/EUR rate is 0.92, it means 1 US dollar equals 0.92 euros. Rates are quoted in pairs (base currency vs quote currency) and can be shown as either "1 base = X quote" or the inverse.
Who sets exchange rates?
In most countries, exchange rates are not "set" by a single authority. They are determined by trading in the global foreign exchange market—banks, central banks, corporations, and investors buy and sell currencies. Central banks can influence rates through interest rates and intervention. The result is a constantly changing "market" rate that we and other services reflect.
Using rates for conversion
To convert an amount, multiply (or divide) by the rate. For example, to convert 100 USD to EUR at a rate of 0.92, 100 × 0.92 = 92 EUR. Our converter and rates table do this for you using live data.