Travel tips

ICE Explains: Exchange rates

What are they?

Exchange rates show the comparative value of different currencies: how many Euros you can get for, say, £100.

Exchange rates are phrased as a number, which typically begins with 1. This is basically a shorthand for saying: 1 unit of the first currency is worth [this number] of the second currency.

For example, if the first currency is GBP and the second is Euro, and the exchange rate is 1.5, then 1 unit of GBP is worth 1.5 Euros. In practice, this means that if you want to convert, say, 30 units of GBP into Euros, you’d get €45.

Why do they fluctuate?

Currencies constantly move up and down against one another as they are bought or sold across the world. The people doing the buying are banks and trading institutions.

An easy way to estimate the value of a currency is to look at how much of it is being bought or sold at any time. When a lot of one currency is being bought, it can be assumed that it is valued highly by the buyers.

There are many reasons why demand for a currency might change. Rising interest rates, increased business activity or political and economic events are common examples.

The amount of travel money you receive will vary from day to day, depending on what the exchange rate is at the time you buy your currency.

How can I get the best value?

A good rule of thumb is to order your currency online. For the majority of currency providers, it’s cheaper to provide travel money online because there are fewer operating costs.

Use our calculator to work out how much you’ll get based on today’s exchange rate, then pick the best way to get your cash – whether that’s click & collect, home delivery, or loaded on a prepaid card.

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