So, how does our currency converter app work?
Welcome to our clever currency Converter App - it's your pocket-sized companion for quick, effortless currency conversions on the fly.
Whether you're on holiday, on business - whatever the reason you need a spontaneous currency swap, our app has got you covered. We use real-time exchange rates to ensure you're always presented with the most precise conversion.
All you have to do is enter your chosen amount in the ‘converter’ box at the top of the page, and then tell us which currency you want it converting from and to. We’ll take care of the rest, and conversion is absolutely immediate.
What do we mean by exchange rates?
If you've ever swapped currencies before, you'll know that normally you don't get exactly the same amount back as you hand over the counter.
If you want to change €100 into dollars, you might get $108 dollars back. That's because of the exchange rate.
To put it simply, an exchange rate is all about how much of one currency can be swapped for another.
So how do exchange rates work?
You could read a whole book on how exchange rates are determined, but the sort answer is that the conversion rate between currencies is affected by how much generally people are prepared to pay (market forces).
All sorts of things can affect how much the foreign exchange market feels a currency is worth - everything from government decisions, economic performance and even war.
This means that exchange rates can go up or down subtly over a long period of time, or quite dramatically and at short notice.
What influences Exchange Rates?
A whole host of factors, both economic and non-economic, can sway exchange rates:
Economic Factors
In economic terms things like inflation, interest rates, GDP and trade balances can all leave their mark on exchange rates. If a country is struggling to control very high inflation, rising prices could mean that its currency is a lot less valuable - and therefore the markets are willing to pay less.
Political Factors
A country's political climate, or even global politics, can also shape exchange rates - and in all sorts of ways. A good example is the impact of political instability. Let's suppose that a country had a general election coming up, or was even in danger of a revolution or political coup. Investors might lose confidence in that country's economic prospects, because they've got no idea who's going to be in charge. Because the country is a less attractive investment opportunity, there will be reduced demand for its currency to invest.
Central Bank Policies
The policies of central banks, including monetary policy and exchange rate strategies, can have their say in exchange rates. If a central bank ramps up interest rates, it might lure foreign investment, and boost the country's currency in the process.
Market Sentiment
How do investors and traders feel about a particular country? This can have a major say on the value of its currency. If they're upbeat about a country's economic outlook, they might invest a lot more; which creates increased demand and pushes up the price.
External Shocks
Events like natural disasters, terrorist attacks, and pandemics can also shake up exchange rates. These upheavals can throw a spanner in the works of international trade and investment, stirring volatility in exchange rates.
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