Exchange rates


#1

Today, I am watching EUR/GBP rate and it isn’t coinciding with financial market.
Ask: 0.85527
Bid: 0.85627
Why isn’t it coinciding?


#2

Here you have the source of information:

https://www.oanda.com/lang/es/currency/live-exchange-rates/


#3

It’s the weekend, at the weekend Revolut takes the market rate on Friday and adds 0.5%.


#4

Hi there,

Please have a look below for an extract of Revolut’s FAQ:

At the weekend (Friday 23:59 - Sunday 23:59) we apply a small mark up on the spot rate as the Forex markets are closed. We take the rate from Friday 23:59 and apply a 0.5% mark up on major currencies and 1.0% on other currencies to protect the company from potential losses due to a large fluctuation in the rate. For illiquid currencies like Russian Ruble and Thai Baht, there is 1.5% mark up on weekend.

Regards,
Julien.


#5

EUR/GBP

Bid: 0.85627 (Have a look at before link)

0.85627 * 0.5/100 : 0.004281 euros.

0.85627 - 0.004281 : 0.85198 euros

0.85198 euros aren’t 0.8491euros ( this last figure is shown on revolut exchange rate).


#6

Sorry Julen!,

I wrote euros instead of pound sterling.


#7

What is the current rate in the Revolut app ?
I have 0.8491GBP.


#8

Yes , you have it. But is it correct?. I was checking it on financial market and it seems not to be right.


#9

So if Revolut rate is 0.8491 and XE (Friday 23:59) is 0.85581 we have:

REV 0.8491 GBP = 1 EUR
XE 0.85581 GBP = 1 EUR

If I add 0,5% to XE rate:
0,85581+ 0.5/100 = 0,00427905
0,85581 - 0,00427905 = 0,8515…

Then compare it to Revolut one:
0,8515 vs. 0.8491

Indeed, I can conclude the mark up is not really 0,5% if I’ve done nothing false.
Maybe @AndreasK or somebody else from RevTeam could help clarify this ?

Regards,
Julien.


#10

Guys, rates is one of the most discussed topics here. I recommend to search the forum and to dive into some of the threads.

Like this:

https://community.revolut.com/t/exchange-rate-provided-is-not-interbank/4311/3?u=frank


#11

Actually this is different as we are not talking about weekdays fluctuation but closed market + WE mark up.


#12

The nature of securities trading is that there is a ‘bid’ and ‘ask’ price (Equities, FX, …). ‘Market’ prices either tend to be an aggregate of that, as an average, or the last traded price.

Therefore it’s a range.

Main reason why it is more expensive (I assume.) to provide FX services on the weekend (hence the fee) is due to lower trading, hence lower liquidity.


Help/Advice General Discussion
#13

I still wonder what sense it makes to compare the Revolut rate to one single different rate from one specific source like Oanda.

NFH provided a link to truefx and explained that true interbank rates are almost impossible to find online. The latest rates for EUR / GBP there are this:

0.8565 (bid)
0.8566 (offer)

My point here: different rate providers (Oanda, truefx) show different rates. And XE is mid-market, not interbank? Revolut says Morning Star provides their rates.


#14

Hello again!,

Thankk you for your replies. In conclusion, the reference price is in Morningstar.

Regards!

Ángel


#15

The bid/offer spread is negligible on liquid currency pairs, so it’s a red herring in this context. It certainly doesn’t create a range. The range is caused by the movement of market price throughout the day.


#16

Mid-market and interbank are not mutually exclusive. Compare XE.com to www.truefx.com. The latter is true wholesale interbank rates, on which you can trade if you have the right software and trading account.


#17

Yes, thanks for clarification.

I was trying to make the point that all math excercises in this thread were based on the wrong assumption that their rate source was the one rate.

But I recently found an addition in Revolut’s FAQs: now they write there that Monring Star is their rate provider.


#18

We can assure you that Revolut isn’t putting an extra markup to what we say on our FAQs and the weekend rate is only 1% and 0.5% for major currencies.

The reason why you feel like you are getting extra percentage points charged is because in some cases (usually rare cases) the difference between the mid-market rate (as shown on XE) and the interbank bid rate can be slightly larger than expected.

What people see online is the mid-market rate, i.e. the average between the bid and offer rate. This is because when you go to search up a currency pair the website doesn’t know whether you’re looking to buy or sell that currency so it just gives the middle.

These interbank bid rates are usually quite hard to find online as they are mainly used by the largest mutual and hedge funds in the world as well as large multinational corporations who have millions (if not billions) of dollars. But Revolut is able to pass on this rate to you with no markup except for what is stated on our FAQs, which during the weekends is 0.5% for the major currencies and 1% for the other currencies.


Understanding Revolut forex
Exchange rate error
Help/Advice General Discussion