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Wednesday, July 29, 2015

Currency conversion

In the world of forex currencies as we know, are all traded in pairs, with the 'base' currency always appearing first as  we can see in the EURUSD chart example below. Naturally enough it is irrelevant which pair we use for demonstration purposes since the same applies for all monetary pairs.

As we can see here the EURUSD chart is telling us that:

1 Euro = 1.09678 U.S. Dollars

But what is the opposite? What is a Euro worth if the U.S. Dollar had been the base currency?  The answer is to simply divide the Euro by the Dollar. As in:

1.09678/1 thus giving you:

1 U.S. Dollar = 0.91175 Euros rounded to the same 5 decimal places after the point.

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