Currency Converter is a Forex trading tool that allows you to transfer currencies from different countries based on current market quotes. In rapidly changing market conditions, the converter will help to calculate the cost of a certain amount expressed in another currency. The goal is not only the calculation of the nominal value in a particular currency but also the determination of the potential volume of the trading position, as well as the assessment of the possible profit from a speculative position expressed in the currency of the trading account.
What data is needed for Currency Converter?
First of all, you need to select the currency from which the transfer will be made from the drop-down list. Each currency has its abbreviation of three Latin letters for ease of use in the international format. You can also search for the required currency by the country in which it is used.
Next, indicate the currency in which you want to transfer. That is, the result of the transfer will be expressed in this currency. The principle of choosing a currency is the same as in the previous case. The Forex exchange rate will be determined automatically by the converter, depending on the current market value.
It is also important to know the amount of conversion, as this affects the final result. The amount is entered in the currency from which you want to transfer.
The final result
According to the results of the conversion, the trader will know what the total amount he can get, depending on the current quotes. In the Forex market, more volatile trading conditions are possible than usual, therefore the result may differ significantly even during one trading session. In this regard, the current Forex exchange rate can have a significant impact on the outcome of the conversion.
Currency Converter Application
In addition to the most common currency pairs, this tool is used for so-called reverse rates. For example, if there is a need to determine the number of American dollars needed to purchase one thousand Swiss Francs. While the main USD / CHF currency pair shows the value of one US dollar against the Swiss franc, the converter will allow you to quickly calculate the amount sought.
Another example of the use of the Currency Converter involves a quick calculation of the so-called cross rates. For example, if you need to transfer funds in British Pounds in relation to New Zealand dollars. Instead of calculating the rates of the main currency pairs GBP / USD and NZD / USD, the Forex trader can quickly get the desired result through the GBP / NZD cross rate.
Particularly convenient use of Converter is the use of so-called exotic currencies. Forex broker quotes rarely include values such as, for example, the value of the South African Rand to the Indian Rupee. A trader will have to look for at least two Forex quotes to transfer one currency to another. However, Converter allows you to do this in one click using online Forex rates.
Currency Converter is a convenient tool for a trader in the Forex market since it allows you to quickly calculate the cost of converting funds from one currency to another. A particularly important application of the converter will be the conversion of cross rates and exotic currency pairs. In the case of frequent overseas trips, this tool will also be useful for budget planning and financial costs in a particular country in the world.