Exchange rate of foreign currencies ?
I have little confusion about Currency Exchange !
Suppose I’m living in UAE I have 100 USD(united states dollar), I want to purchase UK sterling against these 100 USD. Which Rate Will they offer ???
1. A general rate which prevails between these 2 countries at that time
2. First they will convert those dollars to AED (arab emirates dirhams) and then to sterling .
3. Or anything else.
Simply speaking Which rate is offered to customer for 2 foreign currencies in any country ?
Please let me Know.
Regards..
USD is directly converted to GBP (sterlings). In general, all minor currencies are converted to USD first, before converting to other currencies. Major currencies (USD, EUR, GBP, JPY etc.) convert directly from each other, but the spread between the two currencies other than the US dollar is, in most cases, still the spreads between these currencies with USD added together.
In the retail foreign exchange market, currency dealers generally add a very big markup (from a few pips to hundreds of pips) to the interbank market spread.
