What is Currency Conversion?

March 22nd, 2023

Currency conversion involves the relationship between 2 currencies “pairs.” For example, if you converted US dollars to Euros. The first currency listed is the base currency and the second is the comparison currency.

For example, if you were looking at EUR/USD. You are asking: “1 Euro is worth how many US dollars?”

When looking at any currency conversion, it is helpful to understand several terms. You will notice that rates can vary among calculator, so it is helpful to understand where calculators are pulling their rates from.

Sell rate

This is the rate at which foreign currency is sold in exchange for a local currency. If you are heading to Europe or want to transfer money there, you will exchange your US dollars for Euros using the sell rate. You are selling your US Dollars for Euros.

Buy Rate

If you want to buy foreign currency in exchange for local money when you are traveling, you will exchange at the buy rate. If you came back from Europe with currency in your pocket and needed to convert it back to US dollars, this would be the Buy Rate. You are buying US Dollars with Euros.

Cross Rate

This rate is used when people want to exchange two different currencies, not involving their local currency. For example, if you are in the US but wanted to exchange your Euros for Canadian dollars, you would pay the cross rate.

Base Rate (Mid-market or Interbank) Rate

You will often see currency quoted in the base rate. It is also known as the mid-market or interbank rate or even a wholesale rate. This is the rate that banks use to exchange currency with each other.

The base rate is derived as a mid-point between the bid and ask rate. Bid and ask rates include profit margins and overheads of the money providers.

Retail Exchange Rate

The retail exchange rate is the rate that banks, money transfer, and retailers providers use for consumers. Sometimes fees will be added on top of the rates.

How Does Currency Conversion Work?

Currency Conversion Chart Graph

Maybe you want to do some currency conversion yourself, or at least understand how the math works. It does not require complicated algorithms or high-level mathematics. It is basic multiplication or division.

Once you have your list of exchange rates, you easily do the math as follows:

For example, let looks at the EUR and the USD.

In your rate sheet, you see that 1 EUR equals 1.125 USD

If converting from EUR to USD, multiply the amount you want by the exchange value.

For example, 500 EUR times 1.125 equals 562.50 USD.

If converting back into USD, you would divide the amount by the rate.


For example, 500 USD divided by 1.125 equals 444.44 USD.

If you are looking at the rates and see them listed as EUR/USD, when you go left to right you multiply and when you go right to left you divide.Now you know how to do simple conversion, but who has time for all that math. That is where currency converters become very convenient. Let’s now examine the best online currency converters!

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Top 8 Currency Converters on the Web


This is a UK based conversion site. The tool allows you to generate real-time exchange rates of one currency against hundreds of other foreign currencies. Many converters advertise real-time, but it is helpful to understand what that means. In the case of Currency Converter, they refresh their rates every 5 minutes based on currency markets.

The website also provides information about currency investing and currency news. Their prime business is a money transfer service.They also provide JavaScript code for others to add a currency converter widget to their own sites.


XE is a popular foreign exchange tool. XE’s business model is similar to Currency Converter. They are ultimately an international money transfer service.Their site is sleek and easy to use, also providing charts to track the performance of a currency over time. This is a nice resource for those looking to invest in currencies.

XE does use mid-market rates. This is the mid-point between the rate a currency can be bought and sold. These are not transactional rates.


OANDA began in 1996 and is a Forex broker and trading platform. They also provide money transfer services. They have a strong reputation in the online currency community and provides plenty of technical help and analysis for currency traders.

The currency converter is easy to use and provides instant charts and trends along with the bid and ask pricing. Their rate are part of their proprietary tool called OANDA rates. This is a compilation of rates from market data around the world.Furthermore, they have branched out beyond currency and allow trading in commodities, metals, indices, and bonds.

Wise (formerly TransferWise)

Wise does have an easy-to-use converter. However, it is difficult to find on their site, and you have to hunt for it. They are a currency transfer service. If you are looking to transfer money, they do provide you the rates of other transfer services so you can compare prices among all the services available.

Like XE they use mid-market rates in their currency converter.


Like Wise, Exiap is a money transfer site, and owned by Wise. They do have a currency converter that does provide basic information, but if you are looking for detailed technical analysis of a currency, it will be difficult to find.Exiap uses wholesale exchange rates in their converter.


X-Rates has an older looking platform but provides a lot of data beyond simple currency conversion. They do provide conversion for many of the world’s currencies, but not every currency. For instance, many exotic currencies such as the Iraqi Dinar can not be found there.

X-Rates generates revenue not from money services like other converter sites, but by selling ad space on their site. Sometimes the ads can slow down the performance on the site.It’s not clear from where X-Rates derives their currency conversion information.

Yahoo Finance

Yahoo Finance does provide currency conversion for the most popular currency pair along with several cryptocurencies. It is a great place for financial information but does not always have the detailed currency information you may find on other sites.Yahoo uses Market rates for their conversions.


Of course, we couldn’t forget Google. In fact, you probably used it before. If you typed in “convert 1 USD to IQD” you would have got a currency exchange rate. You don’t get all the financial data, but it is good for a quick conversion.Google derives their currency rates from Morningstar.

Looking to Buy or Sell Currency?

How Does Currency Conversion Work

Now that you understand a little more about how currency conversion and converters work, are you interested in buying or selling currency?

Especially if you are looking for exotic and hard to find currencies, you need a source you can trust, not a fly-by-night dealer where you worry over security and certified currency. Instead of taking your chances with Ebay, coin shops, or banks, use US First Exchange. We're 3rd-generation currency brokers and one of the only mail-order currency exchange companies licensed by the US federal government to do business in all 50 states. We deal in over 20 popular and exotic currencies, including the Iraqi Dinar.

We created US First Exchange to provide the best exchange rates and lowest fees for foreign currency. Plus, you can order from the comfort of your home, and have your currency delivered to your front door.

Besides the ease of transaction and favorable rates, US First Exchange has other features most currency brokers don’t have.

100% Insured Transactions

Many currencies brokers are fly-by-night operations who put up an internet shingle to capitalize on rising currencies like the Dinar. Security on these systems are usually low, exposing your information to potential cyber criminals. They rarely insure transactions 100% if they provide insurance at all.Worst is that they may not be available when you are ready to redeem any currency you purchased.

Fully Secure

In light of ransomware attacks on competitors (google the Travelex Attack) and the ongoing threat that online security poses, we can’t stress this enough: our platform is safe, reliable, and secure.

Our process ensures your data protection and a customer service team that is available for your transactions. We aim to provide the best service, and that includes having people to answer your questions and guide you through the process.

Fully Licensed

We are a licensed Money Services business, fully licensed and in compliance with the US Department of Treasury. This is increasingly important. You will find many brokers online, you may have approval from their domiciled state, but aren’t in full compliance with the US Treasury.


US First Exchange is an established currency broker with years of experience with all the major currencies and including exotic currencies like the Iraqi Dinar.

Buying currency online is convenient because it is shipped directly to your front door. Each banknote is certified and inspected before shipping. All orders are 100% insured.

Final Thoughts

You can buy foreign currency online through a secure platform when you use US First Exchange. If you want a safe and convenient way to buy and sell any foreign currency, here's why you should use US First Exchange:

Shipping is fully insured on all orders 24-48 hour shipping options via FedEx Secure payment options include credit, debit, and wire transfer

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Create your order today and receive any foreign currency in 24-48 hours. Pay online through our secure platform by debit card, credit card, or PayPal.

Ready to buy or sell foreign currency? No more waiting. We provide everything you need to ship and receive funds for currencies you own.

We deal in a range of currencies, including exotic currencies like Iraqi Dinar and Vietnamese dong. You can order foreign currency online and have your money shipped straight to your door in 24-48 hours. All shipments are fully insured, and we promise the best exchange rates along with the lowest fees of any money broker in the US.

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