Exchange Rate Calculator – A Good Guide to a Forex Beginner

Currency exchange calculator or exchange rate calculator is one of the best technological revolutions that any trader or investor in foreign exchange market would love to cherish. Anyone who wants dive deep into this risky and slippery foreign exchange market, needs to first understand what is foreign currency rate and how to calculate them. There are many beginner's guide in order to understand the foreign exchange market. After reading them, one should try mock learnings or demo learnings on the trading system or platform with which one is comfortable. There are many on-line foreign currency rate providers as well and they all have free exchange rate calculator available on their website. The only thing you need to do is get yourself registered with their sites and you are done. Some of them also allocate personal financial dealer who can guide you while indulging in foreign exchange transactions. Having said this, the next step for any beginner would be how to choose exchange rate calculator to get the best foreign currency rate.

Very simple way to choose is to ask family, friends and those who are into this market for years. Another is, to surf the net and see who are those which are providing authentic foreign currency rate. You can then compare those rates with the rates provided by banks or any other government organizations. If those rates match, then you can trust that trading system or trading platform. Having chosen your type of trading platform, you need to check whether the currency exchange calculator provided by that platform reflects the right currency rates or not. Sometimes, the calculator also does not list the currency of all countries, and that creates unnecessary trouble in terms of foreign currency rate calculation. Therefore, a currency exchange calculator that provides correct and accurate foreign currency rate   is of paramount importance to Forex traders or investors.

Monitor the movement of currency exchange rate to get the beat deal

These days forex is featured in finance section of newspapers and magazines many a times. What is forex? Forex is an abbreviated name of “Foreign Exchange” market. It is also known as money market where currency of one nation is exchanged with the currency of another nation. These currency exchange takes place for every second and every day in forex and the exchange rate is known as the “currency exchange rate”.

Every person at some point in his/her life come across this biggest financial market of the world. Currency rates of various countries keep changing in value as they are affected by several economical and political factors of the respective nation. Traders buy and sell currencies and earn the profit from the difference of currency rates. Euro and USD are the maximum sold foreign currencies. Even if you do not trade directly in forex, you will use currency market at one point of time. For example, you have bought house in Spain then to pay to the seller you need to exchange currencies. In case you're going abroad, you need to buy foreign currency of your holiday country.

There are many ways to conduct currency exchange but forex provides the cheapest and fastest way. To get the best currency exchange rate, you need to find good forex specialist or broker. You can take help of the internet platform to find good forex firm in least efforts. There are many websites showing currency rates of all major countries. Such websites are also supported by the currency exchange rate calculator wherein you can select the  “From” and “To” currency to know the exchange rate for your international transaction.

Do not blindly rely on forex specialist, keep an eye on the exchange rate movement to get the best deal. There are companies who offer customized services for their business and retail clients. These company offer the flexible solution and fair rates based on their clients' requirements. It is advisable to choose forex over other option if you want to stretch your money at max.

Use Best Techniques to Calculate Currency Rate to Get the Best Forex Rates

A currency rate is a rate at which one currency of the country gets converted into the other currency. For example, you need to invest, trade or travel abroad, then you need to have the currency of another country. In order to get best foreign currency rates you need to be aware about the currency rate of both the countries. A currency exchange rate shows the relative value, or ratio, of one unit of currency compared to one unit of another currency. Any one can approach any bank and it will let you know the currency rate as well as facilitates you in getting foreign currency rates through short transaction.

Currency rate is determined by various factors:

• The rule of demand and supply in the market
• Influence of trade deficit or surplus
• Economic fundamentals and purchase power parity play a major role in deciding foreign currency rates
• The deficit or surplus situation in the balance of payments
• The performance of the economic fundamentals. These fundamentals include GDP growth, inflation, interest rate difference, political economic news that may affect or help the prospects or interest of overseas business clients, etc.

Since, currency rate is dependent on so many factors, it is bound to fluctuate  constantly and it is because of this foreign exchange market is a riskier affair. Therefore, it would be mandatory to take the resort of reliable means to know exact currency rate. If there is any such snag in any on line foreign currency rates providers, your judgment regarding investment, trading or travel is going to be flawed. And, this flaw can cost you lots of money. It is better to contact local banks which are nationalized to get the exact currency rate. However, they may charge some heavy transaction fee which you need to be aware about.

Economical Factors Affect Foreign Currency Rates

Forex is being traded round the clock for 24 hours of the day. It starts with the Tokyo morning and runs upto U.S. Midnight. Central banks, big financial institutes and global investors continuously buy and sell currencies thus the value of foreign currency rate keeps fluctuating. Travelers and big biz often come across currency exchange rates when they are traveling abroad but hardly 1% of them may be knowing what are the factors affecting foreign currency rates.

Currency exchange rates are the core integral part of forex market, over $20 trillion is traded per day. Trading is simply exchanging one currency to another and the relative rate at which it is exchanged is the exchange rate. Foreign currency rates are of two types: fixed and floating rates. Fixed rate of the respective nations is decided by their central banks and it is decided in relation of the other currencies in the world. Once any nation government fix the currency rate, the bank starts international trading to maintain its home currency.

The rule of demand and supply decide for the floating rate of the nation's currency. For example, US currency is having the highest demand in the market means that it is strong currency and if the demand of your currency is less then your currency is considered weak. The government may interfere in the floating rates when the inflation rate in nation goes very high. Interest rates released by the central banks is also one of the major economical factor affecting foreign currency rate. If the china government is offering 9% interest rates for the investors and can buy Japanese yen in 1%  interest rate then investors will pay in Japanese yen to buy Chinese currency. If the interest rate is lower the demand is lower and the currency is weak.

Furthermore, the unemployment situation also affect on the currency rate of that nation. People purchase less products which devalue currency in the international market. The industrial growth also affect on the currency rate which in turn impact on the exchange rate.

Exchange Rate Calculator having Vast Range of Applications

Forex is the most lucrative market on this planet. It is active for 24 hours a day and 365 days a year excluding Saturday and Sunday. The weapon which is widely used in the highest liquidity market is currency exchange rate calculator. This tool perform the most complex process in a fraction and it is quite handy tool. Currency exchange calculator is available online on the number of websites; be it forex websites, currency rate websites or government websites. This tool is free for everyone; all what you need is an Internet connection and a PC or mobile. Smart phones like iPhone, blackberry and android have exchange rate calculator so you can simple convert one currency unit to another anytime using your mobile. Smart phone application of currency exchange calculator has given great flexibility to all those involved in currency exchange market.

Forex is not limited to the traders only, with the fast growth of each nation the people from one country are visiting another foreign country for various reason. You must be thinking how forex market comes in picture? Forex market comes in picture whenever any two currencies are being exchanged. Whether you travel abroad for fun or for business meet, you need to buy the currency used in destination country. To calculate the exchange rate, you can use free online currency exchange rate calculator so that you can calculate the budget in advance. The exchange rates are constantly changing so the converting tools take the latest rate in consideration. It is advisable to use the currency converter of well reputed forex websites. Such companies can provide the most accurate data. If you are  regular traveler then it is imperative to use this currency conversion tool. Businesses buy or sell goods and services internationally thus currency converter is also the most useful tool for them. If you're investing in any currency then it is essential for you to keep an eye on  the currency values. You can use the online calculator for currency conversion and make the profits by selling currencies at the perfect time.

Currency Rates Defined by Many Factors Including Political Conditions

The gyrating currency rates are basically the rates that result from demand and supply rules. The foreign exchange market in which foreign currency rate is dependent upon these rates is constantly changing by these rules. And, therefore, it is the most vulnerable as well as the most slippery of markets in the world and therefore, supply demand rules are governed not by just one factor, but rather many factors. Three major factors include: socio-political conditions, economic conditions and mass psychology. It is these three elements that define higher or lower foreign currency rate at a given time in foreign exchange market.

Talking about market psychology, it is the most difficult element to catch and understand as mass psychology is very complex thing to infer. For example, it is sometimes affected by the rumor of any type. This type of behavior is often described as buy the rumor, sell the fact. People blindly believe in what which is not there and ignore that which is already there. Foreign currency rate and currency rates are also influenced by international events of grave concerns. For example, events like Tsunami that recently hit Japan. During this time, the value of the Yen went down considerably as investors felt very insecure and resorted to a safer currency. In this situation, currency rates work on the principal of supply and demand rules. The demand goes down and therefore value too goes down. If the rates are affected by rumors, they also work under the influence of long term trends. Unlike commodities, currency rates are unseasonal, and therefore, seasoned analysts do make their judgments based on long-term economic and political trends.

Demand and supply rules also include economic numbers that are comprised of money supply, employment, trade balance figures and inflation numbers. Now-a-days, these numbers affect a great deal on the psyche of the market place and they immediately impact currency rates and thereby foreign currency rate.