Why exchange rates matter in everyday life
A holiday in Poland, an invoice from Switzerland, an online purchase in US dollars or a transfer to relatives in Turkey: as soon as another currency is involved, the same question comes up. What is this amount worth in euros, and how much of it actually arrives in the end? The first question is answered by the exchange rate. The second depends on who does the exchange and what markup they charge.
This guide explains step by step how exchange rates work, how to convert amounts yourself, what lies behind the reference rate of the European Central Bank and how to spot expensive markups. The examples are based on the ECB reference rates of 24 September 2026. The currency converter always shows you the current values.
What an exchange rate actually tells you
An exchange rate is the price of one currency expressed in another. In the euro area, rates are usually quoted indirectly: the rate tells you how many units of the foreign currency you get for one euro. On 24 September 2026 the reference rate for the US dollar was 1.1367. In other words, 1 euro equalled 1.1367 US dollars.
The other way round, one US dollar then costs 1 ÷ 1.1367 ≈ 0.8797 euros. This is the direct quotation. Both numbers describe the same rate, just from two directions. Many misunderstandings arise because an exchange office uses one notation and the bank the other. So always check which currency comes first.
If the rate rises from 1.1367 to 1.17, the euro gets stronger: you get more dollars for your money and travelling to the US becomes cheaper. If the rate falls, the euro weakens and purchases in dollars become more expensive.
The ECB reference rate: the neutral yardstick
Every working day at around 4 pm CET, the European Central Bank publishes reference rates for about 30 currencies against the euro. The rates are based on a concertation procedure between central banks that normally takes place at 2:10 pm CET. They therefore reflect a market rate at a fixed point in time.
The reference rate has one big advantage: it is neutral. Nobody earns anything from it, and it contains no markup and no spread. That is exactly why it works as a yardstick against which you can measure every offer from a bank, card issuer or exchange office. The ECB does stress, however, that the rates are for information only. You cannot actually exchange money at this rate anywhere. Read more in The ECB reference rate explained.
How to convert amounts yourself
You only need two formulas. To convert euros into a foreign currency, multiply the amount by the rate. To convert an amount in a foreign currency into euros, divide it by the rate.
1. Euros to foreign currency: amount in euros × rate. Example: €250 × 4.3823 = 1,095.58 Polish złoty.
2. Foreign currency to euros: amount in foreign currency ÷ rate. Example: 80 Swiss francs ÷ 0.9409 = €85.02.
A common mistake is to multiply again when converting back. So do a quick plausibility check: if the foreign currency is “smaller” than the euro, as with the złoty, the figure in the foreign currency must be larger than the euro amount. With the Swiss franc, which is worth more than the euro, it is the other way round.
You will find detailed examples for two particularly popular neighbouring currencies in Converting euros to złoty and Euros to Swiss francs.
Cross rates: when the euro is not involved at all
Sometimes you want to compare two foreign currencies directly, for example US dollars to złoty or British pounds to Swiss francs. The ECB does not publish rates between two foreign currencies, but they can be calculated via the euro. Divide the euro rate of the target currency by the euro rate of the source currency.
Example from 24 September 2026: 1 euro = 4.3823 złoty and 1 euro = 1.1367 US dollars. So 1 US dollar = 4.3823 ÷ 1.1367 ≈ 3.8553 złoty. The currency converter does this automatically for each of the more than 400 possible pairs. The values may differ minimally from directly traded rates, but for invoices and travel planning that is irrelevant.
Buying, selling and the spread
Banks and exchange offices always quote two rates: one at which they buy foreign currency from you and one at which they sell it to you. The difference between the two is called the spread. It is the provider's actual earnings. The reference rate lies roughly in the middle between the two.
There is also a difference between cash and non-cash rates. Non-cash amounts sit in an account, while cash means banknotes you can hold. Because cash has to be transported, stored and insured, cash rates are almost always worse than non-cash rates. Anyone exchanging larger amounts in cash therefore usually pays the most.
What banks, cards and exchange offices charge
The costs of a currency exchange hide in three places. First, in the rate itself: the provider uses a rate that is worse than the reference rate. Second, in a percentage fee, often called a foreign transaction fee on cards. Third, in fixed fees, for example per cash withdrawal.
Many cards charge around 1 to 2% of the amount for payments in a foreign currency. Exchange offices at airports and stations are often much higher. For payments in euros within the EU, on the other hand, no more may be charged than for a domestic payment. How to work out your personal markup is shown in Exchange rate markups on cards and cash.
You can enter this markup directly in the currency converter. With a 2% markup, €100 no longer gets you 113.67 US dollars but only around 111.40. In this case the markup costs you €2. That sounds like little, but on a two-week trip with €2,000 of spending it adds up to €40.
The terminal trap: paying in euros straight away
At many card terminals and cash machines abroad you are asked whether you want to pay in the local currency or in euros. It sounds like a service but is usually expensive. If you choose euros, the terminal operator converts at its own rate, which is often several percent above the reference rate. This practice is called dynamic currency conversion.
The rule of thumb is therefore: always choose the local currency, i.e. złoty in Poland, francs in Switzerland or lira in Turkey. Your own bank then converts at its conditions, which you know and can compare. Since 2020, providers in the EU have had to state the markup over the ECB reference rate as a percentage before the payment. A quick look at this figure is worthwhile.
Exchange rates fluctuate: what the 90-day chart shows
Exchange rates change every day. In the 90 days before 24 September 2026 the rate against the US dollar moved between 1.1367 and 1.1699. That is a range of almost 3%. For €1,000 you would have received a good 33 US dollars more on the best day than on the worst.
Even professionals rarely manage to predict the right moment. The chart does help you judge whether a rate is currently rather high or low and how much a currency fluctuates. The currency converter therefore shows the last 90 days for every pair, with low, high, average and change. For larger amounts it can make sense to exchange in several steps instead of betting everything on one day.
Exchange rate and purchasing power are two different things
A favourable exchange rate does not automatically mean that a country is cheap. What matters is what you get for your money locally. One euro gets you more than four złoty in Poland but less than one franc in Switzerland. At the same time, rents, restaurant visits and groceries in Switzerland are considerably more expensive than in Germany. The cost of living calculator shows how prices differ. How much purchasing power your euro loses over time through inflation is calculated by the inflation calculator.
How to use the currency converter
1. Enter the amount, either with the slider or directly in the number field.
2. Choose the source and target currency. The arrow button swaps them with one click.
3. Optionally enter your bank's or card's markup to see what actually arrives.
4. Read off the rate, the inverse rate, the quick table and the 90-day chart. With the share function you can pass on the result with exactly these settings.
Our own server fetches the rates from the ECB. Your browser does not contact any third party, and your inputs never leave your device.
In short
1. Euros to foreign currency: multiply. Foreign currency to euros: divide.
2. The ECB reference rate is the neutral yardstick without a markup.
3. Calculate cross rates via the euro: rate of the target currency ÷ rate of the source currency.
4. Cash is almost always more expensive than paying by card or transfer.
5. At the terminal, always pay in the local currency, never in euros straight away.
6. Compare every offer with the reference rate. The difference in percent is your markup.