Money: How to Read Currency Exchange Rates

How to Read Currency Exchange RateS

If you’re travelling overseas, sending money overseas, or importing, then currency exchange rates are something you need to know. But, many people find them confusing.

Learning about currency exchange rates can open up the world. If you can learn how to calculate them, you’re one step closer to doing business with people from all over the globe.

AUD to PKR is a great example of a popular foreign currency exchange rate pair, but the principles we explain below are the same for USD to CAD, EUR to GBP, and all others.

Here we cover what the basic categories of currency exchange rates are and how you can read and calculate them. Hopefully, you’ll be able to trade your money for a better return in no time!

#1 – Learn the Categories of Currency Exchange Rates

There are several different types of currency exchange rates, and it’s important to know which describes the rate you’re looking at. The most common short-term exchange rates are known as full-market and interbank.

In a nutshell, the full-market rate is a midpoint of the bid/ask price quoted on financial markets, while the interbank rate is a midpoint between quotes by large banks.

In full-market and interbank exchanges, there is also often a spread added to the midpoint. If you’re trading with a company like Currency Online, you should be aware of which type of exchange rate will be used for your transaction.

#2 – Know How to Calculate Currency Exchange Rates

The first step in calculating currency exchange rates is to determine the current rate. This may sound obvious, but many people don’t do it correctly. You can look online where there’s many sources to find out real-time currency rates.

Once you have the correct rate, you need to figure out how much it is in your local currency. You can subtract one currency from another, but this can be a little tricky if you’re converting between different units of measure (such as dollars and euros).

Instead, you can use the current exchange rate (from your preferred currency converter) and then divide it by 100 to get your local currency equivalent.

The best way to become comfortable trading currency exchange rates is to practice, so you may want to get on a foreign exchange trading platform and start practicing.

Some people find it useful to use Microsoft Excel to help them practice. Excel has currency conversion spreadsheets that you can use, although you can of course just use a regular calculator and a piece of paper to convert between currencies.

#3 – Find the Price Movement of Currency Rates

Once you know what the current currency exchange rate is, you can see how much it has changed. The next step is to calculate your percentage change. This will help you figure out whether the majority of changes are up or down. This will help you to see whether a price has moved in your favour – or against it, and how much you’re making or losing on that day.

#4 – Get Prepared and Execute

Once you’ve practiced enough to get the hang of it, it’s time to do your actual trade. Make sure you follow all your learnings and know what prices you will enter and exit the market at.

Get used to using the currency exchange rate calculator you’ve chosen as part of your trading practice. It’s easy to overlook the small details of trading when you’re under pressure and start to make mistakes, particularly if you’re new at the trade.

How to Read Currency Exchange Rates

Tools To Calculate Exchange Rates

#1 – The Currency Table

Currency tables are a great way to learn about different currencies. You can use them to see how currency exchange rates change over time and the percentage changes between different currencies. Knowing these can be very useful when trading foreign exchange.

#2 – Currency Converter

Luckily, there are some excellent currency converters out there (such as the one on Excel’s website). These calculators can help you convert one currency into another and are especially useful for calculating exchange rates.

#3 – Excel Spreadsheets

Because of its variety of functions and formulas, Excel spreadsheets are a great way to calculate foreign exchange. You can use them to convert different currencies into your local currency, as well as learn about how exchange rates have changed over time.

MORE – Money: Four Best Practices To Be A Successful Forex Trader

MORE – New to FX Trading? The Difference Between Direct & Indirect Quotes


  • porsha
    Reply porsha Wednesday 14th March, 2012 at 6:40 pm

    love these looks, very trendy

  • ellisonralph
    Reply ellisonralph Wednesday 14th March, 2012 at 10:45 am

    color blocking at its best!

  • Reply jones Friday 17th February, 2012 at 10:24 am

    colour blocking is gorgoues when done right…i think it needs black as a base though

  • Reply lauralai Sunday 29th January, 2012 at 4:58 pm

    Great colours!

  • Reply stels Monday 9th January, 2012 at 9:59 pm

    great post!

  • Reply Xiaxiao Tuesday 3rd January, 2012 at 7:44 am

    love the orange top with black jeans

  • Reply dysfunktionalfolk Saturday 31st December, 2011 at 3:11 pm

    How helpful!

  • Reply kaywhy Wednesday 21st December, 2011 at 11:59 pm

    man how i love colour blocking <3

  • Reply esha Wednesday 30th November, 2011 at 6:41 pm

    awesome. gonna try this one out (:

  • Reply ladylike Thursday 17th November, 2011 at 1:43 am

    colour blocking!! *heart*

  • Reply Sarahh Wednesday 9th November, 2011 at 3:13 pm

    Love that bright green colour!

  • Reply AmberB Monday 7th November, 2011 at 6:17 pm

    Love the orange / black combo outfits.

  • Reply kimberlay Monday 7th November, 2011 at 6:13 pm

    Lovely colours

  • missbonnieblu
    Reply missbonnieblu Monday 7th November, 2011 at 3:28 pm

    Brilliant tips!

  • Reply holly vals Friday 4th November, 2011 at 3:01 pm

    Colour is so much more fun! Cute ideas

  • Reply silver_fox Wednesday 2nd November, 2011 at 1:25 pm

    Nice article!

  • scatternat
    Reply scatternat Sunday 30th October, 2011 at 1:51 pm

    Lovely finds!

  • Reply kittydoll Saturday 29th October, 2011 at 5:06 pm

    Thanks for the tips, loving the colours!

  • GoodThanks
    Reply GoodThanks Friday 28th October, 2011 at 2:37 pm

    Yep totally loving the brights this season!

  • Reply leighbonello Wednesday 26th October, 2011 at 5:52 pm

    Cute outfits

  • Reply saymx Wednesday 26th October, 2011 at 8:11 am

    great tips 🙂

  • Reply DuckieBox Tuesday 25th October, 2011 at 1:03 pm

    loving the bright colours! can’t wait til it gets a bit warmer (:

  • Reply tessarella Tuesday 25th October, 2011 at 8:04 am

    the colours! nice tips

  • Reply lovelovelove Monday 24th October, 2011 at 8:17 am


  • Reply chocolatelace Sunday 23rd October, 2011 at 10:26 pm

    awesome tips

  • Reply audrey89 Saturday 22nd October, 2011 at 8:21 pm

    Great ideas!

  • Reply piccolanippy Saturday 22nd October, 2011 at 5:19 pm

    Cute outfits!

  • leilani-lovebird
    Reply leilani-lovebird Thursday 20th October, 2011 at 5:16 pm

    loving the ideas… colour always freaks me out.. im a black and white lover but im getting there with a little bit of colour splash here and there… LL xx

  • Reply vonisntflexi Tuesday 18th October, 2011 at 10:26 pm

    i never able to get it right..

  • Reply ggional Tuesday 18th October, 2011 at 6:25 pm

    thanks for the tips! i like simple bright colour pieces too!

  • Reply simply Tuesday 18th October, 2011 at 2:27 pm

    nice style!

  • Reply BellaB Tuesday 18th October, 2011 at 11:03 am

    Interesting approach.

  • Reply krystaldb Tuesday 18th October, 2011 at 9:21 am

    Everything old is new again!

  • Reply Tuesday 18th October, 2011 at 8:53 am

    Beautiful..Thanks for the tips

  • Fashionista8P
    Reply Fashionista8P Tuesday 18th October, 2011 at 7:29 am

    i love the long skirt!! such great outfits, she really has fabulous style

  • Reply doogs Tuesday 18th October, 2011 at 7:28 am

    I just love anything to do with colour blocking

  • Reply jarjar Tuesday 18th October, 2011 at 7:22 am

    great tips

  • Reply hollyg Tuesday 18th October, 2011 at 7:21 am

    Bring on the color!

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    love all the outfit. the model is pretty.

  • Reply maddidegaris Monday 17th October, 2011 at 11:34 pm

    All amazing!

  • Reply thing13 Monday 17th October, 2011 at 10:38 pm

    nice tips!

  • Reply mummo13 Monday 17th October, 2011 at 9:47 pm

    Great tips, thanks.

  • Reply audrey89 Monday 17th October, 2011 at 9:32 pm

    Love the pictures!

  • Reply Whatthe Monday 17th October, 2011 at 8:34 pm

    Mm this is interesting. I tend to colour block naturally with the way I dress. It’s just easy for me to do and I like the way a solid colour simplifies everything else – like it goes with just black or just white etc. Easy and simple style. Cool.

  • Reply mmariahhlee Monday 17th October, 2011 at 6:08 pm

    yay. i love this girl!.

  • lovethoseshoes
    Reply lovethoseshoes Monday 17th October, 2011 at 5:54 pm

    gorgeous pics and amazing tips 🙂

  • Reply MsKimo Monday 17th October, 2011 at 5:44 pm

    Oh hai there, Emma! Great tips, amazing bright pieces. x

  • hausoftina
    Reply hausoftina Monday 17th October, 2011 at 4:52 pm

    I’m a big fan of this trend! You purchased such great pieces – I love the red jacket!

  • aimzybabe
    Reply aimzybabe Monday 17th October, 2011 at 3:25 pm

    Love the inspiring pictures too, especially the 1st pic (the orange tee with the maxi skirt) – that is my style!

  • Reply sass Monday 17th October, 2011 at 2:55 pm

    Love these bright bold colours!!

  • Reply Serena86 Monday 17th October, 2011 at 2:02 pm

    great tips!

  • Reply livi Monday 17th October, 2011 at 1:54 pm


  • sumaya
    Reply sumaya Monday 17th October, 2011 at 1:21 pm

    Thanks for the tips! Some nice pieces here 🙂

  • Myra
    Reply myra00 Monday 17th October, 2011 at 12:40 pm

    Wonderful idea, thanks for the tips!

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