For example, if you were heading to Europe, you would exchange British pounds for euros at the sell rate. Sell rate – This is the rate at which we sell foreign currency in exchange for local currency.

Holiday money rate or tourist rate – This is another term for a sell rate.It is often denoted like this: GBP/USD, EUR/JAP, AUD/INR Currency Pair - This the the relationship between two country's currencies.

For example, if you want to exchange Australian dollars into US dollars.

Cross rate – This is the rate we give to customers who want to exchange currencies that do not involve the local currency.

Commission – This is a common fee that foreign exchange providers charge for exchanging one currency with another.

For example, if you were returning from America, we would exchange your US dollars back into British pounds at the buy rate of the day.

Buy rate – This is the rate at which we buy foreign currency back from you into your local currency.

How to read exchange rates - currency jargon explainedįoreign exchange can be confusing, so to help break through the confusion, here are some common terms associated with currency: If a currency is not competitively priced, traders may avoid buying, or even sell it, essentially driving down its value. If a currency is competitively priced, traders will buy the currency, essentially driving up its value. The value (or price) of a currency is determined by its traded volume. Government central banks also have the ability to set a currency at a constant price through a method called pegging, which essentially tethers the value of one currency to another. The volumes of currencies traded are increased and decreased depending on the attractiveness of any particular currency, which depends on a multitude of factors such as political stability, economic strength, government debt and fiscal policy among others. One currency can be purchased by another currency through banking institutions or on the open market. Currencies are traded (bought and sold) daily around the world.

Exchange rates are influenced by banks and trading institutions and the volume of currency they are buying and selling at any given time.

Exchange rate of all currencies