Get the Accurate Exchange Rate Calculator to Know the Exact Forex Rates

Exchange rate calculator is a small device that simplifies the calculation of complex currency rates. Currency rates are complex because of their constantly fluctuating nature due to various reasons. On line exchange rate calculators are available in plenty as there are many financial service providers who make them available on their web sites. For example, in today's time, when the market is constantly in flux due to looming U.S. debt crisis and worries over euro zone debt crisis, the foreign exchange rates too constantly fluctuate. In such a situation, while indulging in foreign exchange transactions, one needs to take care of the accurate foreign exchange rate, the failure of which has every chances to make you in trouble. Instead of resorting to old ways of approaching brokers and calculating the rates, the traders can now directly access the currency calculator and calculate currency rates. However, in order to access this device, one must be computer and Internet literate.

In a scenario where there are so many exchange rate calculators available, it is difficult to decide which one to select to calculate currency rates. Therefore, it is important to keep a watch on selected sites that offer this free currency calculator. One of the best ways to verify the authenticity of the exchange rate calculator is to compare the rates that it shows with the rates of the banks. It may take a few days, but the verification would give you peace of mind and confidence to use that device. Once you verify the rates and you are convinced that the calculator that you have chosen is the right one, you can then start calculating the rates with the help of this wonderful device. One box has the currency which you want to convert and the other box is about the currency into which you want to convert the other currency. And the third box is where the real currency rate gets displayed.

Foreign Exchange Rates Involve Currency As Commodity to be Traded on the Market

Any talk regarding foreign exchange rates is incomplete without mentioning the workings of foreign exchange market. This is the market which involves currency rates of the two respective countries. Like any other market, foreign exchange market too is a market where buyers and sellers negotiate and agree on one price which is also called currency exchange rates. Here, the commodity being negotiated is foreign exchange itself that is currency itself and the price that is decided is known as foreign exchange rates. To be precise, the U.S. dollar is traded for the euro at a particular rate of exchange. And, since it is a global liberalized world, the currency rates are affected by various socio-political issues.

In order to protect the investment on foreign currency, there is a concept called forward market for foreign exchange. In this forward market, buyers and sellers arrive at some agreement to buy and sell currency at a specified foreign exchange rates. As per this agreement, the specified bulk of foreign exchange is decided to be bought or sold at a specified rate at some date in future. This then implies that there is a considerable time gap between the negotiations of the transaction and the actual settlement of the negotiations.

The forward market is different from the spot transactions in a sense that spot transactions are decided, negotiated and settled within two business days. The forward market is protective in a sense that when the negotiations are sealed, they are out of the “uncertainty zone” which typically defines the foreign exchange market. In a typical forward market contract, foreign exchange rates are calculated based on the prevailing interest rates and the spot exchange rate. Hence, forward exchange rate is the spot rate adjusted for the difference in interest rates between the currency rates of two different countries and the  currency financial instruments over the period of time between when the transaction is negotiated and when it is settled.

Currency Rates – Results of Many Factors Including Socio-political Environment

Currency rates are axis of foreign exchange market which is a decentralized over-the-counter market. These are the rates at which currencies are traded in the foreign exchange market. It is based on these rates that the currency exchange rates are determined in the market. The stronger the currency rates, the higher the currency exchange rates. One of the best ways to know foreign exchange rates is to access online currency exchange calculator.

If one wants to be well-versed with the foreign exchange market, one must learn how to operate the calculator. There are many on line currency exchange rates providers and they also offer on line calculators. The popularity of this calculators is due to its easy availability and user-friendliness. It has three boxes – two of them have drop-down boxes and one which reflects output. The two drop down boxes have the currencies – one allows to put the currency to be converted and the other allows to choose the currency in which the first entered currency needs to be converted. In order to get the accurate currency exchange rates, it is important that the device you use is correct and up to date.

Currency exchange rates are the rates which also depend upon demand and supply rule. If the demand of that particular currency rates is higher, it will have strong hold on the market. For example, in today's scenario, the demand of the Swiss franc is higher, therefore, the currency rates of this currency too are higher and consequently foreign exchange rates against the euro too are higher. It is considered to be safe-haven currency precisely for the reason that investors are getting higher interest on this currency and it is the currency on which they can bank on in the current global economic uncertainty. Currency rates therefore determine what will be the direction of the foreign exchange market.

Currency Calculator Helps Both – Finance Professionals and Common Investors

Currency calculator is an on-line tool that converts one currency rate into the other. Now, this obviously means that it has the facility to have all the currency rates in it so that when there is any input, there is an output for any user to make an informed decision. This tool is useful when you travel as well as when you want to trade on the world's decentralized over the counter market. And, the use of the exchange rate calculator is not only confined to finance professionals but also to the common traders and investors who want to convert their currencies to know the exact currency rates. As it is known, foreign exchange market is highly fluctuating and slippery. It is therefore very important to know what is the situation of the market from time to time. And, that is where, even if you are on the move, if you have currency calculator with you, you will have the benefit to know what are the currency rates at that particular moment.

Exchange rate calculator can be accessible on mobile to know the exact currency rate. It can also be accessible on your tablets. And, as it is no secret now, mobile application development is the rage with the users as well as developers. There are various applications for currency calculator so that you can access the calculator right from your mobile and know the real time currency rate whenever required and wherever you are. There are various websites on Internet that are offering the currency calculator, but it is always recommended to go for a reputed provider. As there are several websites who do not update the rates as per the exact foreign exchange rates and hence it can be risky to rely on such sites. An ideal currency calculator does offer the currency rates for almost all country currencies and also shows the current real time conversion values.

International Exchange Rates Change When Values of Currencies Change

International exchange rates are rates between two currencies that are traded on the decentralized over the counter market called foreign exchange market. Hence, currency rates make the two currencies of the nation nothing short of any commodity which has its own rate. Currency exchange rates need to be known by those who have to undergo a monetary transaction out of one's own country. And, it is precisely the reason why it is called international exchange rates.

When currency exchange rates are based on market, they tend to change whenever the values of currencies involved in it change. The currency becomes more valuable when the demand to buy it is higher. This market changes are completely dependent upon the demand and supply rule. If there is lesser demand to buy that currency in question, its value in the foreign exchange market will get decreased. Now, let us explore what are the factors that may contribute in deciding either the increase or the decrease in demand and supply of the currency rates.

When one of the currencies involved in international exchange rates gets more value it is because its demand is higher. And its demand is higher because in that specific country, there is an increased transaction demand for money or an increased speculative demand for money. The transaction demand for money has direct connection to country's business activity. The more the business activity, the higher gross domestic product and employment levels. The more the unemployment, the less the spending activity on goods and services. Hence, it is very simple to understand this rule of demand and supply in order to understand international exchange rates. When there is an imbalance in this demand and supply, Central banks often adjust the available money supply to absorb the changes that are happening in the demand for money due to business transactions.

Currency Exchange Rates Form an Axis of Foreign Exchange Market

Currency exchange rates are the rates at which two different currencies of two different nations are traded. Here, the currencies turn into commodities like any other commodity in the market and their foreign exchange rate is defined by currency rates. Currency rates are very crucial to any transaction in foreign exchange market. For example, if you are going for a vacation in U.S. and you are a Canadian citizen, you need to convert your Canadian dollar into U.S. dollar which require thorough knowledge of U.S. currency rates and also the  prevalent global affairs. According to the experts, before plunging in the deep and dark sea of foreign exchange market, one needs to study the market thoroughly at least for six months.

Currency exchange rates are often divided into two categories: fixed and floating. A fixed exchange rate involves mutual agreement between the two countries to maintain a stipulated fixed rate through the use of monetary policy. A floating rate flexible in a sense that two countries agree to abide by the international market forces determine the rate through demand and supply rule. In this, the rates would undoubtedly fluctuate with a country's exports and imports transaction.

The world has adopted to this floating rate because it has proved to be more  economically viable in spite of the fact that floating currency exchange rates are more fluctuating than the fixed ones. But, the biggest disadvantage of the fixed rates are they are decided by the government and therefore they tend to take into consideration political situation of the country rather than economic conditions of the country. For example, some countries peg their exchange rates artificially low with respect to a major trading partner to make their exports to that partner artificially cheap. Hence, currency exchange rates depend upon various factors and those factors contribute a great in determining foreign exchange rate.

Value of Currency Rates Decide Vacillating Foreign Exchange Rates

If currency rates is parameter of any nation's economic health, so is its fluctuation a parameter of the slippery foreign exchange market. Whenever there is a change in these rates, market based currency exchange rate would also change. Whenever there is an increase in currency rates, it means that the currency is in great demand than its supply. This is called demand and supply rule. If the demand will get decreased, it will not be that valuable and hence its rates too would go low. When they would go low, the foreign currency rate as well as currency exchange rate too will go low. However, if this less value is inferred as people's lack of interest in holding the wealth, then it would be wrong to assume. It just means that people now want another currency which is strong in its value as their wealth in foreign exchange market.

Now, there may be various reasons why currency rates increases or decreases. Increase in currency rates is due to either an increased transaction demand for money or in increased speculative demand for money. Now, the country's business activity, gross domestic product (GDP), and employment levels all contribute to this increased speculative demand for money. For example, if the rate of unemployment is higher, then there will be less spending activity and the demand of goods and services will decrease. This would automatically affect currency exchange rate. However, the central banks of the country are authorized to accommodate changes in the demand for money because of their business transactions. However, the hard part is to manage the speculative demand for money. This hard part is managed by adjusting the interest rates. It is adjusted keeping in mind investor behavior. If the interest rates are higher, then investors would be attracted to buy the currency of that particular country. Following this, currency rates would go higher and the value of that currency in foreign exchange market would go up.