Currency Exchange

AAA

DEFINITION of 'Currency Exchange'

A business that allows customers to exchange one currency for another currency. A currency exchange may be a stand-alone business or may be part of the services offered by a bank or other financial institution. The currency exchange profits from its services either through adjusting the exchange rate or taking a commission.


Also referred to as a foreign exchange market and a bureau de change.

INVESTOPEDIA EXPLAINS 'Currency Exchange'

The exchange rate that a currency exchange quotes is typically close to the spot rate, although the exchange will adjust this rate somewhat to ensure that it makes a profit on the transaction. Because the transaction is not conducted at the spot rate, and depending on the profit that the exchange wants to make, consumers may find that it is less expensive to incur ATM or credit card fees at the foreign destination, rather than use exchange services ahead of time.

RELATED TERMS
  1. Online Currency Exchange

    An online system for exchanging one country's currency for another. ...
  2. Forex - FX

    The market in which currencies are traded. The forex market is ...
  3. Quote Currency

    The second currency quoted in a currency pair in forex. In a ...
  4. Currency Pair

    The quotation and pricing structure of the currencies traded ...
  5. Authorized Forex Dealer

    Any type of financial institution that has received authorization ...
  6. International Currency Exchange ...

    The rate at which two currencies in the market can be exchanged. ...
Related Articles
  1. The Big Mac Index: Food For Thought
    Forex Education

    The Big Mac Index: Food For Thought

  2. Currency Exchange: Floating Rate Vs. ...
    Forex Education

    Currency Exchange: Floating Rate Vs. ...

  3. Currency ETFs Simplify Forex Trades
    Options & Futures

    Currency ETFs Simplify Forex Trades

  4. Global Trade And The Currency Market
    Forex Education

    Global Trade And The Currency Market

comments powered by Disqus
Hot Definitions
  1. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  2. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  3. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  4. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
  5. Earnings Before Interest After Taxes - EBIAT

    A financial measure that is an indicator of a company's operating performance. EBIAT, which is equivalent to after-tax EBIT ...
  6. Direct Participation Program - DPP

    A business venture designed to let investors participate directly in the cash flow and tax benefits of the underlying investment. ...
Trading Center