Exchange rate calculators are online tools which you use to calculate the indicative value of exchanging one currency into another currency. The calculated value is only indicative and is normally based on prevailing rates of exchange. The actual converted value however may be different as it will depend much on the money changer or the bank through which you source out the actual exchange.
You use an online exchange rate calculator so you’d have an idea of how much to expect when you finally do exchange one currency with another. This way, you’d always know if you are getting a fair deal with the rates of exchange. You must however allow for some margin of differences as the banks or the money changers will normally have to factor in their margins into the rates. The indicative rates you get from online calculators do not take such things in their calculations. At the very least, you would know if the bank or the money changer is giving you a fair deal or not.
Exchange rate calculators can be found online in various websites. They come either as a widget or a graphical user interface application which can automatically calculate based on the current rates. These calculators are fed live with spot currency rates in real time to provide the most accurate results.
Conversion with these exchange rate calculators is pretty simple. You simply chose the two currencies and type in the quantity of the currency you want converted. When you click the convert button you’d get the converted indicative amount immediately. Since these calculators are linked to real time providers, you can be sure you will always get the latest indicative value for your conversion needs.
An exchange rate calculator, though simple, is an important business tool used by traders and travelers who do business or engage in transactions in foreign soil. These tools are utilized for the quickly converting one currency to another based on prevailing exchange rates.
It provides the user a ballpark figure as to how much money in his own currency will he need when he is travelling to another country or transacting business with foreigners.
There are also certain limitations to what currency calculators can deliver. Every conversion made is only as good as the rates of exchange used. While these online calculators get feeds from the spot currency market, the feeds may come from various terminals that connect different foreign currency market makers and dealers. In short, each calculator may have a different real time data provider. As a result, one online currency calculator may give a different conversion value than another online currency calculator which receives its data feed from a different terminal. However, the difference may just be a few pips, though they could add up resulting in a significant disparity in conversion values as more transactions are done. In the first place, these calculators are meant to just give you a reference value to work on since the actual conversion can be way off the mark for a number of reasons as stated above.