Question acc. Exchange-Raes CHF-EUR


#1

Hi,
I topped up my account with some CHF which i want to exchange to EUR.
(also have a EUR-Sepa-Topup**, so my account “wont starve” :wink:

Issue now:
last few weeks, rate 1EUR->CHF climbed and sunk from 1.16 to 1.18 and back. The rate 1CHF->EUR solely declined from .88 to .85.

I know my commercial appranticeship was a long time ago, but it is my understanding, that if the EUR is worth more CHF, one CHF gets less EUR. But if the EUR is worth less CHF, one CHF gets more EUR.
…strangly enough, following the history of the exchange-rates, the less a EUR is worth in CHF, the less EUR one gets for a CHF…

Shouldn’t these two rates be somewhat related to each others?
eg. EUR worth more => 1€ = 1.18CHF AND 1CHF = 0.84€…
Or, EUR is worth less =>1€ = 1.15CHF AND 1CHF = 0.87€…

Yet, when the EUR is worth more, you get less EUR. If the EUR loses, you get less EUR…
eg. EUR worth less => 1€ = 1.16CHF IN REVOLUT 1CHF =1.84

At the moment, Revolut shows 1EUR 1.1737CHF, 1CHF = 0.8517EUR…

Do I suffer from a severe Brain-Fart, have I looked at the wrong times for ERs or is there something wrong with the exchange rates? (I’m seriously a bit confused now)

** BTW: the SEPA-Topup in EUR: postfinance offered a better exchange-rate from CHF to EUR, what fueled my suspicion about the ERs, because normally, postfinance has one of the worst ERs.


#2

The rates are somewhat related, of course, but there are two different rates and a spread. And like with the stork market, every rate is made independently following the principles of demand and offer. Exchanging in circles will result in a loss. (Revolut does not use mid market rates.)


#3

A little spread I can understand, but with every swiss bank (even postfinance - and their ERs are … well) , the exchange-rates are related - EUR rises, the more CHF you need to get ammount X. The EUR declines, the less CHF you need to get X.
?


#4

Yes, sure.

Look at your example:

Revolut shows 1 EUR = 1.1737 CHF, 1 CHF = 0.8517 EUR

0.8517 * 1.1737 = 0.99964

You never will get your initial 1 EUR here. That is the spread.


#5

i now see my error… i calculated the wrong way…
thanks, @Frank