The rate you see quoted is almost never the rate you get. The gap between them — the spread, plus whatever margin your bank or card adds — is the real cost of moving money between currencies, and it is usually larger than any fee shown on the receipt.
Reading a quote
A pair like EUR/USD = 1.0850 means one euro buys 1.0850 dollars. The first currency is the base, the second the quote. To go the other way, divide: 1 ÷ 1.0850 = 0.9217, so one dollar buys 0.9217 euros.
Dealers quote two numbers — a bid and an ask. They buy from you at the bid and sell to you at the ask. The difference is the spread, and it is why converting money and immediately converting it back leaves you with less than you started.
| Channel | Typical markup over the interbank rate |
|---|---|
| Interbank / mid-market | 0% (the reference rate) |
| Specialist transfer services | 0.3% – 1% |
| Credit card abroad (no-FX-fee card) | 0.5% – 1% |
| Credit card abroad (typical card) | 2.5% – 3.5% |
| High-street bank transfer | 2% – 4%, plus a flat fee |
| Airport exchange bureau | 7% – 15% |
On a 2,000 conversion, the difference between a specialist service and an airport bureau is commonly 150–250. The mid-market rate — the midpoint between bid and ask, which is what this converter and most published rates show — is the benchmark to measure any offer against.
Dynamic currency conversion: always decline
When a foreign card terminal offers to charge you in your home currency instead of the local one, it is applying its own exchange rate, typically 3–7% worse than your card's. The screen presents it as a convenience and shows you a familiar number. Always choose to be billed in the local currency and let your card issuer do the conversion.
Why the rate moves
- Interest rate differentials. Capital flows toward higher real yields, and central bank decisions move currencies more than almost anything else.
- Inflation. Persistently higher inflation tends to weaken a currency over the long run.
- Trade and current account balances. Sustained deficits create structural selling pressure.
- Risk sentiment. In stress, capital moves to currencies perceived as safe — historically the dollar, franc and yen — regardless of fundamentals.
Cross rates
Most currency pairs are not quoted directly against each other. To get one, route through a common currency: if USD/INR = 83.20 and USD/JPY = 149.50, then INR/JPY = 149.50 ÷ 83.20 = 1.7969. Each leg carries its own spread, which is why converting an unusual pair often costs more than converting via the dollar in two deliberate steps.
Practical guidance for travel
- Withdraw larger amounts less often — flat ATM fees hurt small withdrawals disproportionately.
- Use a card with no foreign transaction fee, and always decline the terminal's home-currency offer.
- Avoid airport and hotel exchange desks except for a small amount to get you into town.
- Order any physical cash in advance rather than at the point of departure.
- Check whether your bank charges a separate international ATM fee on top of the network's.
What this converter shows and does not show
It uses published mid-market reference rates, updated periodically. It is the correct number for comparison, budgeting and understanding what a fair rate looks like — but it is not a dealable price. No retail provider will give you the mid-market rate, and rates for physical cash are always worse than for electronic transfers, because handling notes costs money. Use the figure here as the benchmark, then judge every quote by how far it sits from it.