A currency converter is a calculator that converts the value or quantity of one currency into the relative values or quantities of other currencies. For example, if you had $1 that needed to be exchanged into the local currency of a country you are visiting, you would need to know the dollar-euro conversion, if you were traveling to certain parts of Europe, the dollar-pound conversion if you were in traveling in the United Kingdom, the dollar-yen conversion if you were traveling in Japan, the Canadian dollar-U.S. dollar conversion if you were traveling in Canada or the Swiss francs-dollar conversion if you were traveling in Switzerland. A currency converter stores the most recent market valuations of the world's currencies, which allows individuals to compare the value of one currency against those of others in the database. The values of the different currencies are determined based on the supply or demand of dealing prices between international banks.

Currency conversions also can be determined by contacting a local bank and asking for exchange rates. However, the rates that are quoted to retail customers at a bank may differ slightly from those at which banks trade among themselves because banks make a small profit on the exchange rate each time they buy or sell a currency. The rates shown on online rate converter tools usually do not take this retail profit into account.

To find the value of any country's currency and compare it to the currencies of other countries, online resources such as the Yahoo! Finance Currency Converter can be helpful. In addition, charts showing currency prices over various periods of time are available, which will help you gain perspective on the value of a specific currency over time.

(For more on this topic, see A Primer on the Forex Market.)

  1. Why do forex traders use a currency converter?

    All currencies are quoted in pairs - one country's currency against another country's currency. A currency converter is used ... Read Answer >>
  2. How do I find out my bank's bid-ask spread for currency conversions?

    Learn how to find your bank's bid-ask spreads for currency conversions, and understand why you should consider alternative ... Read Answer >>
  3. What is foreign exchange?

    Foreign exchange, or Forex, is the conversion of one country's currency into that of another. In a free economy, a country's ... Read Answer >>
  4. How do I convert dollars to pounds, euros to yen, or francs to dollars, etc.?

    Currency can be converted using an online currency exchange or it can be converted manually. To use either method, you must ... Read Answer >>
  5. What is a 'busted' convertible bond?

    Learn about busted convertible bonds; these are hybrid securities with conversion prices significantly higher than the market ... Read Answer >>
  6. Why is the U.S. dollar shown on the top of some currency pairs and on the bottom ...

    All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called ... Read Answer >>
Related Articles
  1. Trading

    Here's How You Calculate An Exchange Rate

    Struggling to get a grasp on exchange rates? Here's what you need to know.
  2. Trading

    The Cheapest Ways To Get Your Currency Exchanged

    Travelers have a number of options when it comes to exchanging currency. Find out the cheapest way to exchange.
  3. Investing

    Why Include Convertible Securities in Your Portfolio

    What are convertible securities and why you should include them in your portfolio.
  4. Trading

    Top 5 Reasons To Invest In Currencies

    Here's why you should get into the forex market.
  5. Investing

    The Wonders Of Convertible Bonds

    Ever wondered what exactly a convertible bond does? Read the features of a convertible bond and learn how important the conversion factor is to you as an investor.
  6. Trading

    Top 5 Hardest-Hit Currencies

    The value of a country's currency is dependent on many factors that will cause it to fluctuate, relative to other world currencies.
  7. Trading

    What Happens in a Currency Crisis?

    A currency crisis comes from a decline in the value of a country’s currency.
  8. Trading

    The Impact Of Currency Conversions

    Will a rising or falling dollar hurt you or your company? In this article we explore the impact of currency converisons on consumers, comanies, and countries.
  9. Personal Finance

    Travel Smart By Planning How You'll Pay

    With a little pre-trip planning, you can avoid being stranded without adequate funds.
  1. Universal Currency Converter

    A program that allows for the quick conversion of currencies ...
  2. International Currency Converter

    An electronic program that allows for the quick conversion of ...
  3. Conversion Rate

    The ratio at which one currency can be exchanged for another. ...
  4. Conversion Price

    The price per share at which a convertible security, such as ...
  5. Currency

    Currency is a generally accepted form of money, including coins ...
  6. Conversion Value

    The financial worth of the securities obtained by exchanging ...
Hot Definitions
  1. Subprime Auto Loan

    A type of auto loan approved for people with substandard credit scores or limited credit histories. There is no official ...
  2. Racketeering

    A fraudulent service built to serve a problem that wouldn't otherwise exist without the influence of the enterprise offering ...
  3. Federal Debt

    The total amount of money that the United States federal government owes to creditors. The government's creditors include ...
  4. Passive Management

    A style of management associated with mutual and exchange-traded funds (ETF) where a fund's portfolio mirrors a market index. ...
  5. Series 7

    A general securities registered representative license administered by the Financial Industry Regulatory Authority (FINRA) ...
  6. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
Trading Center