Currency Converter

Understanding Currency Exchange: Factors That Affect Rates

Currency exchange rates fluctuate constantly due to a variety of economic and political factors. Understanding these can help you get better rates when traveling or doing international business.

Key factors influencing exchange rates include interest rates (higher rates generally strengthen a currency), inflation rates (lower inflation strengthens a currency), political stability, economic performance, and debt levels. Central banks may also intervene to influence their currency's value.

When converting currencies, you'll typically see two rates: the "bid" (what buyers will pay) and "ask" (what sellers will accept). The difference is the spread, which represents the profit for the exchange service. Our calculator uses mid-market rates for the most accurate conversions.