June 28, 2017 at 3:44 am

A Complete Guide to Exchange Rates

Our economy sees tens of thousands of people move their money across borders every year. These people include people who own property abroad or are retired. They also include parents who pay for their children to study at expensive and prestigious schools all around the world.

When so much money is moving around on a regular basis, a guide to exchange rates is crucial as most of these people make frequent transfers with many of them having little to no knowledge about the foreign exchange rates.

How does a guide to exchange rates help us?

There are a lot of bad rumors floating around about how these exchange rate policies are only there to impose large transfer charges. However, it should be noted that most of these rumors are false and it is quite the opposite. It is not that hard, and you save money while going ahead with a transaction of this nature. Any guide to exchange rates covers some basic things that you need to know or some basic things that you must know.

Let’s start by knowing what foreign exchange rates are. In simple words, exchange rates are the value of one country’s currency as compared to another. Their quotation in the foreign exchange markets can be a little confusing.

Every guide to exchange rates out there will tell you the same stuff that is being covered here, so you can do your research before going ahead. For example, let us take the pound and the euro. It is the most common comparison and helps us understand the conversion. It is commonly expressed regarding pence per euro. As the pound strengthens, its value in the euro bracket also rises. This is because the pound costs more than the euro.

There are a lot of factors that affect exchange rates. The major factor is inflation, which is a regularly debated topic amongst scholars whose articles have helped this writer write this guide to exchange rates. The countries with stronger currencies are compared with lower countries, hence dropping their value in the market. For example, if the UK is hit with inflation, their goods automatically become overpriced, and this leads to a decrease in their demand in the market. Any guide to exchange rates will help us understand this.

The second factor is interest rates. Higher interest rates are crucial to strengthen a currency and to attract foreign business. The higher the interest rate a bank offers for a particular amount deposited by a common man, the more likely that person is to deposit more money. This increases the amount of the country’s cash reserve which in turn leads to healthy business opportunities and opens up a variety of trading options.

A guide to exchange rates helps you understand interest values and the benefits and cons of it.

Other factors influence exchange rates as well. Government debt and the strength of other currencies comparatively are a few of them. The government refers to any guide to exchange rates to get the job done.

A guide to exchange rates also helps a person understand the conversion values

Exchange rates can fluctuate very fast. It can dramatically rise or fall within a week. Like last year, the rate for the sterling-euro was 1.234 on January the 3rd, but it fell to 1.167 by January 31. The difference does not seem big when you compare such small amounts but when you compare larger amounts like if you got 123.99 euros for 100 pounds at the start of the month, at the end of it, it is just 116.72 euros. That is a tremendous difference. However, by the end of the year, it climbed back to a stable 120.20 euros.

However, the most important question you should be asking yourself before you make any decisions is ‘when.’ Our guide to exchange rates will help you know as to when should you exchange or transfer money to reap the most profits. Like this website  will guide you through the entire process of money transfer.

Our guide to exchange rates says that you do not need to think a lot about rates when you exchange money since the economy adjusts to the rates most of the times, so it is not a thing that you need to worry. You can transfer or exchange money whenever you want and for whatever purpose you want.

However, before you do, it is advisable to read a guide to exchange rates.

Now, the last and probably the biggest question that arises is that why don’t we just go to the bank. Well, to be honest, this is probably the biggest mistake a lot of people make money transfer, and exchange agencies are specifically designed to carry out the sole function of exchanging and transferring money, whereas a bank is a multitasking establishment which is not as fast or as efficient as this.

Money transferring is not a hassle. Reading just one guide to exchange rates can make you a more confident person in this field.