Euro Converter, Euro Conversion

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A euro converter is a tool that converts the source currency into the euro or the euro into the source currency. The euro is the basic monetary unit that has been adopted by 16 nations of the European Union. The benchmark for euro conversion is regulated by the market forces of demand and supply.

Euro Conversion: Basics

The exchange rate of a country’s currency vis-à-vis the euro (EUR) is flexible and is determined by the forces of demand and supply. For instance, a rise in the demand for the euro in the international markets will make the currency more expensive. This means that a trader has to pay more units of his country’s currency to buy one unit of the euro.

A currency pair like EUR/USD indicates the total amount of US dollars required to buy one euro. In this case, the US dollar is the quote currency, whereas the euro is the base currency. For example, if the EUR/USD pair is trading at 1.45, it means that by paying $1.45, a trader can buy one euro.

Variations in the interest rate of the European Central Bank (ECB) and the national banks of other countries affect the final exchange rate. For instance, if the ECB’s interest rate is higher than that set by the Federal Reserve Bank of the US, the euro will appreciate in relation to the US dollar. Furthermore, the euro will decline in value against the US dollar if the inflation rate in the European Union is higher than the inflation rate in the US.

Finding a Euro Converter

Since the exchange rates fluctuate frequently, it is important to use a euro converter that can perform currency conversions in seconds. Many web-based currency converters perform instant currency conversions on the basis of the current mid-market exchange rates. The web is flooded with freeware that assures authentic currency conversions. An investor can start with any of them and gradually move on to an advanced version.

At times, web-based currency converters also provide an investor with an option to trade currencies online. Such conversions are highly cost effective and can be done at a minimal transaction cost. However, investors should be cautious of the risk of online frauds.

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