Currency Converters Key Terms

Deepen your knowledge of currency converters by diving into these key terms

Currency converters give you the power to see how much one country's money is worth in terms of a different country's currency. As technology has improved, currency converters became more accurate. Companies now update converters regularly to reflect the latest exchange rates and market events. In practice, currency converters are easy to use, but knowing how they work means you'll need to understand the foreign exchange. A good place to start is by knowing currency converters key terms.

Forex

Short for foreign exchange, forex is simply the technical name for currency conversion. The network of banks and individual investors that trade currencies is the forex market.

Exchange rate

The exchange rate is a ratio that expresses the value of one currency in terms of another. Currency converters use the exchange rate to calculate how much foreign currency you can buy with what you already have.

Mid-market currency rate

A mid-market rate falls somewhere between a currency's buy rate and sell rate. It's supposedly a more accurate reflection of the currency's value, since it doesn't take into account each exchange provider's profit margins and overhead.

Dinar

The dinar is the official currency of many Central Asian and African countries. Iraq, Kuwait, Jordan and Tunisia all use the dinar, making it an important currency in the Arabic economic region.

Currency data feed

Sometimes abbreviated CDF, a currency data feed is a real-time Internet stream containing exchange rates and other important financial data. These are valuable time-savers for businesses that rely on the foreign exchange for pricing, trades, and decision-making.

Troy ounces

Companies don't measure gold, silver and other precious metals in traditional ounces. Instead, they use Troy ounces, which are 12 ounces to the pound instead of 16. This is important to remember when converting currency into gold.