Currencies constantly move up and down against each other as financial markets change. These movements can be caused by supply and demand, as well as by political and economic events.The market (or spot) exchange rate, is the rate at which banks exchange currencies. There are a lot of processes and people involved in providing currency into your hands. There is a cost to doing this, which means that the value of the currency is affected to cover all of said cost.At Travelex, we constantly improve our systems and processes so we can provide you with great currency exchange rates .There are a lot of foreign currency providers in the US, offering you a range of products and services. With so much choice, it means that you can spend a lot of time to find the best exchange rate in the market. With our Online Price Promise, we promise to give you the lowest online price for foreign currency in the U.S. If you find a lower exchange rate, we’ll match it.
There’s no doubt that foreign exchange can be a confusing subject, especially with all those industry terms that get thrown around. Here we break down some of the most common terms, giving you a better understanding of all things currency.
Market/spot rate: This is the rate that banks or large financial institutions charge each other when trading huge amounts of foreign currency. It’s also known more formally as the ‘interbank’ rate.
Spread: This is the difference between the buy and sell rates offered by a foreign exchange provider such as us.
Sell rate: This is the rate at which we sell foreign currency in exchange for local currency. For example, if you were headed to the UK, you would exchange your US dollars for British pounds at the sell rate.
Buy rate: This is the rate at which we buy foreign currency back from you and exchange it into your local currency. For example, if you were returning from the UK, we would exchange your British pounds back into US dollars at the buy rate of the day.
Vacation money rate or tourist rate: This is another term for a sell rate.
Exchange rates tell you how much your currency is worth in a foreign currency. Think of it as the price being charged to purchase that currency. Foreign exchange traders decide the exchange rate for most currencies. They trade the currencies 24 hours a day, seven days a week. This market trades $5.3 trillion a day.Prices change constantly for the currencies that Americans are most likely to use. They include Mexican pesos, Canadian dollars, European euros, British pounds and Japanese yen.
Source : https://www.travelex.com/rates