What is a currency exchange rate?

An exchange rate is a rate at which one currency will be exchanged for another currency. Most exchange rates are defined as floating and will rise or fall based on the supply and demand in the market. Some exchange rates are pegged or fixed to the value of a specific country's currency.

How much money do you get if you exchange currency?

To work out how much of another currency you’ll get, just take the amount you want to exchange and multiply it by the exchange rate. So, if you’re exchanging £500 into euros and the rate is GBP/EUR 1.10, then you’ll end up with €550 (assuming you get the market rate and excluding any fees).

What are exchange rates on BBC Bitesize?

BBC Bitesize What are exchange rates? • If you want to convert money from one currency (type of money) to another then you will use an exchange rate. • Exchange rates tell us either what £1 is equal to or what 1 unit of another currency is equal to. • Currencies use different symbols and a unique three-letter code.

How does currency exchange work?

It works the same way in reverse. The EUR/GBP rate might be 0.90, meaning you’d get £0.90 for each €1 you exchange. The rate directly affects the amount you get when you exchange currency. To work out how much of another currency you’ll get, just take the amount you want to exchange and multiply it by the exchange rate.