You have your flight tickets in hands, your luggage is packed and you are ready to relax during your annual leaves but there is one last issue that needs to be fixed, converting money.
Only problem, this stories of exchange rates seem to you complicated and you never really know which rate to use.
Today we are explaining how to understand exchange rates to make sure you never get lost again. We want you to spend hassle free holidays.
Let us start with an example, you wish to exchange pounds into euros. You are then a selling pounds and buying euros. On the GLOBCOIN® currency convertor on the left you can see that the GBPEUR exchange rate is at 1.1980
This rate means that in exchange for £1 sold you receive €1.1980.
So by selling £850 you receive 850 × 1.1980 = €1,015.45
How much pounds do you receive if you sell one euro?
You proceed here to the inverse operation in which you sell euros to buy pounds. The exchange rate applying to this transaction is this equal to 1/GBPEUR so equal to 1/1.1980 = 0.8347
By selling €1,000 you receive 1,000 × 0.8347 = £834.70
How to know if I am a buyer or a seller?
This is very simple, you will always be a buyer of the currency you need and a seller of the currency you own.
Ok but what exchange rate to use?
You need to use the exchange rate whom first currency is the one you sell (or own). In our example above, let’s assume you wish to sell euros to buy British pounds. You need to use the EURGBP exchange rate – currency sold vs currency bought.
By using this technique, we guarantee you will make no more mistakes and converting your currencies will be from now on a child’s play!