How the result is calculated
An exchange rate is the price of one currency in another, and a reference rate is the price at which nobody outside the interbank market actually trades. This guide explains where the converter's rate comes from, how it handles a pair that does not include the euro, and how to read the gap between it and the rate you are offered.
The benchmark is the European Central Bank's daily reference fixing, which most European businesses, tax authorities and statisticians use, and the second worked example shows the cross-rate arithmetic for a pair that does not involve the euro.
rate(from → to)units of TO per euro ÷ units of FROM per euro
convertedamount × rate(from → to)
- units of X per euro
- the ECB fixing for currency X, quoted as how many units one euro buys
- rate(from → to)
- how many units of the target currency one unit of the source currency buys
Because the calculation is a single division and a multiplication, it is exact to floating-point precision; only the display is rounded. Amounts of one unit or more are shown to two decimals, smaller values to four, so that a rate such as 0.0062 is still readable.
Worked example
| Item | Amount | How it is obtained |
|---|---|---|
| Units of USD per euro | 1.08 | the ECB fixing for the dollar |
| Units of EUR per euro | 1 | the euro is the base |
| Rate, USD to EUR | 0.9259 | 1 ÷ 1.08 |
| Converted amount | €92.59 | 100 × 0.9259 |
The fixing moves every working day, so the converter's own figure for 100 dollars will differ from this; the arithmetic is the same.
| Item | Amount | How it is obtained |
|---|---|---|
| Rate, USD to GBP | 0.7963 | 0.86 ÷ 1.08 |
| Converted amount | £79.63 | 100 × 0.7963 |
| Rate back, GBP to USD | 1.2558 | 1.08 ÷ 0.86 |
| Round trip | $100.00 | 79.63 × 1.2558: the converter's round-trip test checks this |
Reading the result
The headline is the converted amount at the reference rate. The two rates under it, from→to and to→from, let you check either direction; providers sometimes quote the inverse to make a rate look better than it is. The fixing line gives the date of the rates in use, and the status beside it their standing: current for the latest working day's fixing, or a warning when the rates are more than three days old or come from a cached snapshot because the live source was unreachable. The quick-reference table lists 1, 10, 100 and 1,000 units both ways, handy for pricing a menu or a shopping list on the move.
What changes the result
Reference rate versus the rate you get
The ECB figure is a mid-market rate: the midpoint between what dealers pay and charge for a currency at the moment of the fixing. Nobody outside the interbank market trades at exactly that price. When you exchange money you are quoted a rate that includes the provider's margin, and often a fee on top.
| Provider | Typical gap from the reference rate |
|---|---|
| Bank cash exchange or transfer | 2% to 4%, sometimes plus a fee |
| Card with a foreign-transaction fee | About 3% |
| Card with no foreign-transaction fee | Under 1% |
| Specialist transfer service | Under 1% plus a stated fee |
| Airport bureau | 10% or more |
Card networks (Visa, Mastercard) set their own daily rates close to mid-market, but the issuing bank often adds a foreign-transaction fee of around 3%; cards advertised as "no foreign-transaction fee" usually come closest to the reference rate. The practical use of a reference-rate converter is therefore comparison: convert the amount here, compare it with the amount a provider offers, and the gap is what that provider is charging. A quote of €90 for $100 against a reference of €92.59 means a cost of about 2.8%.
When the rate matters and when it does not
Rates for the major pairs move by fractions of a percent on an ordinary day, so for small purchases yesterday's fixing is indistinguishable from today's. They matter for large or time-sensitive transactions, a property deposit, a tuition payment, a business invoice, where a 1% move on £20,000 is £200. For those, treat this converter as a benchmark, get a live quote from your provider, and consider whether the timing of the transfer is within your control.
For historical or accounting purposes, note that the ECB fixing is the rate many tax authorities accept for converting foreign income and expenses. If you need the rate for a specific past date, the ECB publishes its full history; this tool shows the latest fixing only.
What is not included
- Provider margins and fees. The converter shows the mid-market reference. Any real transaction costs more, by the amounts in the table above.
- Currencies outside the ECB list. The ECB publishes reference rates for 30 currencies against the euro: the US dollar, British pound, Swiss franc, Japanese yen, Chinese yuan, Canadian, Australian, New Zealand, Hong Kong and Singapore dollars, the Indian rupee, South Korean won, Mexican peso, Brazilian real, South African rand, Turkish lira, Israeli shekel, and the Nordic and Central European currencies. Many Middle Eastern, African and Southeast Asian currencies are not available here.
- Historical rates. Only the latest fixing is loaded.
- Intraday movement. The fixing is a single daily snapshot at about 16:00 CET.
Using the result
Use the converter as a benchmark rather than a price. Convert the amount, compare it with what your bank, card or transfer service offers, and the difference is the real cost of the exchange. For a large transfer, get two or three quotes against the same reference on the same day and pick the smallest gap.