We all know the term âExchange Rateâ but there are many things about exchange rate which you may not know. So, I decided to let you guys know about those details. Letâs check out.
What is an Exchange Rate? Itâs a way to describe how the value of one countryâs currency compares to another countryâs currency.
Exchange rates are usually labelled with the currency codes of the two currencies being compared. For example, GBP/USD exchange rate. The first currency listed is the one being purchased.
The number describes the price of one currency in terms of the other currency. So, GBP/USD exchange rate is 1.32 means you need to pay USD$132 to purchase GBPÂŁ100.
Why are exchange rates important? If you are travelling somewhere in the world, no matter whether thatâs for a short time or long time, you need to be aware of the exchange rates when converting or spending the money. They also play a major role when you are transferring money internationally.
Why do exchange rates change? Exchange rates are floating all the time as foreign exchange traders buy and sell currencies. When a currency appreciates, its exchange rate with another currency increases and more of the foreign currency is needed to buy one unit. If a currency depreciates in value, that means its exchange rate with a foreign currency goes down and less of the foreign currency is needed to buy one unit.
Why is the mid-market rate shown in the Sell screen? Shouldnât we see the Sell rate? I mean, I see 1 EUR = 1.1028 USD, but 100 EUR will get me 110.16 USD, not 110.28 USD. I only see the Sell rate in the Review order screen.
Plus, when setting up a Limit order, I canât set a rate below the shown (mid-market) rate, so I canât set up an order to sell 100 EUR at, for instance, 1.1020 USD. This is not ok and should be easily fixed.
Yup, Iâm really pissed about that too - What You See is NOT what you get until you progress to the review order screen when you discover that you get significantly less exchangeâŚ
Itâs the one thing that is really getting my goat at the moment. It didnât use to be like that until the extra step was introduced by which time, the rate may have changed in a fast changing rate scenario. should be better than that!
I have an update. After updating the app today, the exchange screen shows the actual sell rate. So thatâs solved. Well done!
However, the Limit order screen still shows the mid rate as the threshold, so you can only order a limit sell at a rate higher than the current mid rate - so significantly higher than the current sell rate. This means you might have to wait a lot for a limit order to execute. Not ok for day to day use.
E.g.:
Market sell: 1 EUR = 1.0949 USD
Limit sell: 1 EUR > 1.0961 USD
So I canât set a sell limit order for 1 EUR = 1.0955, but I can use 1.0956
I feel like this can be easily fixed. Unless itâs by design, of course.
Revolut currency exchange benefits arenât what they used to be, but they might still be better than competitors. Iâd appreciate a little more transparency, though.
I have the same issue as described in the above posts, when trying to use Limit Order feature, the price I need to set the target is much higher than the current Market Order price.
For example in my case, if the price for 1 EUR is 4.9291 RON, I cannot input in the Limit Order a price lower than 4.9372 RON.
This means that I cannot set a target to sell my EUR once 1 EUR will be valued at 4.9300 RON, as I could few months ago.
I contacted support and after raising the issue to the FX team they concluded that this is a desired change but, to be honest, I cannot understand what would be the reason behind this.
I also asked how can I set the new Limit Order price in order to make sure that the exchange will happen at a certain value (for example set 4.94xx to change at 4.9300) but the support person was not able to tell me how much do I need to add to my desired value in order to obtain it.
So, from my point of view, it was just a âitâs not a bug, itâs a featureâ kind of result.
I emailed to feedback@revolut.com asking for more details about this but for the moment I got no replies.
I was wondering if there is a way of predicting the best time to exchange one currency to another when travelling O/S? I am going to Canada and Alaska in May and the rates are not favourable. How can I find out if the exchange rate is likely to increase before May?
Hi @Brian60 and welcome
Accurately predicting exchange rates is no easy task - even for professionals! If it were that easy, weâd all be millionaires!
I use (this site) to monitor exchange rates and make my decisions based on additional commentaries. The rates you see there are generally the so called âheadlineâ rate but you will not necessarily obtain that from although quite often close to it less a few pips. When rates are volatile, the rate shown in apps such as the one listed may lag the true rate at any given time but you can often gauge the direction of movement.
If you prefer a mobile app, you can install âEasy Currency Converterâ from the Play Store. This has a graph which shows the trend and a News feed to get further observations. You can select the currency pairs you are interested in at will in either.
I trust that helps.
What you can do is rely on analysts that track indexes like the DXY, rely on analysis by Bloomberg or Financial Times. But things donât always work out like expected. Itâs always going to be a bet.
This is what the FT wrote recently:
But what about the dollar?
Think of the best-performing asset of 2024 so far, and chances are, the dollar isnât first to mind. (âŚ)
But it has risen 2.3 per cent since the end of December, beating US stocks (up 1.7 per cent) and bonds (down 1.2 per cent). This wasnât supposed to happen with forecasts pointing to a weaker dollar this year as the Federal Reserveâs highly anticipated interest rate cuts make the dollar less appealing.
Predicting currencies may feel like betting on the âoutcome of a coin tossâ, as former Fed chair Alan Greenspan put it. But ignore the forex markets, or get them badly wrong, and the effects can be painful. Just ask anyone who bought Japanâs Topix index last year using unhedged dollars.
So, I decided to let you guys know about those details. Letâs check out.
Let me know in the comment section if you want to know about anything else.
should be better than that!
Welcome to the 
