Back in the day when people bartered grain for salt, there wasn’t a centralized form of exchange that ensured the value of a good is consistent everywhere. Traders in the olden times were primarily dependent on the limits of human perception and transacting in good faith. It was considered a milestone in the history of global commerce when finance had finally been democratized and the exchange of currencies had been given a better system. Nowadays, there’s no commodity more traded in the world than money.
Travelling, transacting online and trading goods or services demand an exchange of currencies. The most crucial stage when negotiating for a good price is in knowing the worth of one currency against the currency you’re exchanging it for. When such an opportunity comes, it helps to understand the fundamentals that affect the fluctuations of currency values, but not to the extent of making your own guestimates. That’s when a currency converter comes in handy.
What a Currency Converter is for
A currency converter functions no differently from converting time from hours to minutes or converting distance from kilometers to feet or converting temperature from Celsius to Fahrenheit, and so on and so forth. A currency converter is especially useful for knowing the value of one currency against another. Different currencies give different valuations, depending on which it is measured against and when, which makes the conversion of currencies quite complex.
Fortunately, conversion of currencies is no longer as daunting as it once was. With digital currency calculators available almost everywhere, the need to know the price of one currency when converted doesn’t have to be like throwing a dart. With a currency converter, you can hit the bulls-eye even with your eyes crossed. This convenience has opened new pathways of opportunities that constant price fluctuations and the differences of currency values give. Whether you’re visiting a new country, shopping online, exporting or importing goods with a trade partner abroad, a currency converter is a very useful tool.
Why a Currency Converter Is Important Especially for Traders
Traders of currencies, goods, and services understand the importance of what having a reliable currency converter brings to the business. This is especially helpful for institutional traders who deal with large-scale transactions wherein small price fluctuations mean a lot for the company’s finances.
That’s why it’s common among these kinds of traders to enter the foreign exchange market and maximize the opportunities it can offer on a day-to-day basis. These opportunities include earning forex gains, protection of profits, hedging against risk of currency devaluations, and limiting or cutting forex losses.
In the foreign exchange market, traders get an option to sell first when prices are high to buy later and pocket the gains. However, the market gives no guarantee what direction the currencies will actually take at any given time. Every bit of news that comes out referring to a country’s central bank interest rates, political climate, economic outlook, or investors’ confidence altogether influence a country’s currency valuation.
Among traders, it’s mainly about making strategic trade positions that will help them make a profit whether a currency appreciates or depreciates. A good currency converter takes a trader one step ahead of the competition in a very dynamic market.
Why Currencies Are Converted
There are many reasons why a currency is mostly converted among global traders. First, there’s greater demand for certain currencies where the consumption of widely traded commodities such as energies, precious metals, or agricultural products are also great.
Second, in the forex market, the country that shows the most promising economic data such as higher GDP and better industrial productivity means currency appreciation is imminent, so the demand for their country’s currency also rises. Any other reason why a currency is mostly converted is usually inherent in the history and qualities of a currency’s home country.
The US Dollar is one of the most competitive currencies. The IMF lends in terms of USD to countries that require financial assistance, and it is being done in billions of dollars. Dollarization is still being practiced in certain countries, while the other countries keep USD as a reserve and as a means for price stabilization.
The Euro, which has been in circulation since 1999, is widely traded as a currency because it is embraced by a majority of European countries. The Swiss Franc is also considered competitive because of its distinctive quality as a neutral currency.
How to Use a Currency Converter
A currency converter computes currency valuations according to the latest data on exchange rates. It’s not necessary what the calculator is being used for but it would require you to know first the amount of money you’re willing to exchange for another currency. You have to set the base currency, as well as the currency in which you want it converted.
Type in the number of units, then, almost instantly, the currency converter will show you how many units your money is worth in a different currency. Most currency converters are offered for free so you can make a variety of computations in different currencies anytime.
For example, you want to know how much your 100 USD is worth when converted into EUR. The currency converter will simply do the computation for you without requiring any information from you about the latest exchange rate for EUR/USD. The information is embedded in the system and it will calculate the numerical data available to give you the answer. It’s a straightforward process where it’s evident how the accuracy of the data is so important and can set one currency converter apart from the rest.
Do You Need a Currency Converter?
Trade dealers, suppliers, bankers, creditors and travellers are the most common users of currency converters. When traders of products and services want to project sales or revenues, prepare a budget or estimate future income in a foreign currency, the trader can compute easily with a currency converter.
Traders of currencies such as bankers, creditors, and other financial institutions can get overly fastidious in their choice of currency converter, especially if they are dealing money for institutional investors. Small miscalculations can make them lose a lot of money, which can be prevented with a more sophisticated converter such as those that use up to 5 decimal places with corresponding real-time news that explains the latest currency fluctuations.
Importers or exporters of goods such as multinational manufacturing companies, industrial or agricultural producers, online bulk shoppers and suppliers have great need for a currency converter. They can estimate the worth of a transaction and can set aside enough funds to maximize the growth potential or to cushion for any costs that come with trading in a globalized market.
What Are Some Options for Currency Converters Online?
A pioneer in conversion of currencies, XE Currency Converter has garnered quite a number of site visits by virtue of being one of the first in the market that supplies currency data and a currency converter. Since the 1990s, XE has had the reputation for providing exchange rates of all the currencies globally traded and they serve them real-time. The services they offer online are also provided in other platforms. With a long history in research and data collection, XE has equipped itself well enough to provide its visitors the information that they need delivered in a way they want.
Oanda is another widely used currency converter online. Their philosophy is evident in the simplicity of the website interface. Aside from providing currency data, Oanda also offers other information important to traders in forex and CFD. All these are shown in user-friendly platforms that investors of varied skill levels can equally enjoy. The company website also offers news, tools, and solutions for businesses and institutional investors.
Why TradingToplists.com Is the Most Reliable Source for Exchange Rates
Being a reliable destination for anything about trading, TradingTopLists.com has what it takes to make one quick visit worth your while. The website offers up-to-date data to meet every trader’s needs viewable in desktop, mobile or tablet platforms. It doesn’t guarantee that you get a good return from your investments, but it does offer relevant and accurate data to help you make the right choices at the right time.
TradingTopLists.com features a currency converter that is easy to use and available 24/7. Aside from the latest currency updates, it also provides real-time information that covers trading in equities, CFD, commodities, binary options, and cryptotrading. Simplicity, convenience and quality are the values that it adheres to, which its site visitors will surely appreciate.
Going global is no longer a choice for most of us. In the 21stcentury, it’s a way of life. Today, transactions are globalized through the internet. Travelling overseas is no longer a luxury but a culture. Trading goods, services and currencies worldwide is made easier with new technologies in transportation as well as communication. All these activities cannot come about without the exchange of currencies as its lifeblood. Alternatives for currency converters may abound, but nothing beats having an efficient tool as a partner while you conquer the demands of your global endeavors.