Exchange rates are often shown as pairs – using the 3 letter ‘code’ for each currency. So Pound to Euro exchange rate is shown as GBP/EUR – with a decimal figure showing how many Euros you will get for a single pound. The exchange rate for GBP/EUR at the time of writing this article according to Google is GBP/EUR (1.27).
The difference between the price a currency dealer is prepared to purchase a currency for and the amount a currency dealer is prepared to sell it for. The buy price is always lower than the sell price, so to use a simple (made-up) example every €1 a currency dealer buys they can then sell for €1.1. The profit they make is the spread. Smaller differences in dealers’ sell and buy prices usually indicates there are lots of people buying and selling currency.
Midmarket Exchange Rate
Sometimes also called the ‘interbank rate’ or ‘spot rate’ is widely accepted as the ‘true’ exchange rate. It’s the median average (mid way point) between the buy and sell prices on global currency markets. At Monese we use this rate when you send money abroad.