Why are prices in EUR for consumer items often the same number as original USD price, but the GBP price applies the actual exchange rate?
"The simplest answer would be: Because they can. Why charge less for something if people will pay more? One example are Apple products. While there the price number is not exactly the same in EUR and USD, they are so close that, effectively, the EUR product is more expensive. Many things go into a price. There might be reasons for products in the EU being more expensive to produce or distribute. Or people in the EU might be in general more willing to pay more for a certain product. In that case, a company would forgo profits when they offered it cheaper. Also, prices are relative. Is the USD price the ""correct"" one and the exchange rate should dictate what the EUR price is? Or vice versa?" It's mostly VAT (value added tax or sales tax). For example an US IPad is $499 without tax, and a German IPad is EUR 499 including 17% VAT. The base price is actually only EUR 417.  In addition to that, cost of business is a little higher in Europe because of tax structures and because smaller countries cause higher overheads. In the EU prices on consumer-focussed sites* are quoted inclusive of VAT. In the USA prices are  quoted exclusive of sales tax. Consumer pricing is usually driven at least partly by psychological concerns. Some pricepoints are more appealing to certain types of buyers than others.  The Euro vs dollar exchange rate has fluctuated a bit over the years but it's generally averaged somewhere around 1.2 dollars per Euro over the last decade. VAT has varied around 15%-20% in most cases. Put these things together and the same headline price points are generally appropriate in both the USA and the Eurozone. OTOH the Brisith pound has been worth substantially more than the dollar or the Euro. So it makes sense to have a lower headline price in the UK. * B2B focussed sites often quote prices exclusive of VAT, you need to be aware of this when comparing prices.
Rates are arrived at by the cumulative buying and selling on the foreign exchange market, much the same way that stock prices are arrived at.  If there are more people wanting to buy dollars with euros, EUR/USD goes down.  If more people want to buy euros with dollars, then EUR/USD goes up. The initial rate was about $1.18 per euro when it began trading on January 1st, 1999.  It replaced the European Currency Unit at that time, which was a weighted basket of currencies of (more or less) the participating countries. You're correct about the printing press in the US and other countries.  The exchange rates do reflect in part how much of a relative workout those printing presses get. You're assuming here that anything that is difficult to obtain will be highly desired.  For me, value is largely determined by the buyer. Even if it takes the same effort to get 20 bushels of apples and a nugget of gold, if the majority of people find a nugget of gold to be worth 100 bushels, that will be the value of gold.   Conversely, lets say there is an element buried deep in the earth that has no use whatsoever. Even if it takes the effort of 10 nuggets of gold, because nobody has any use for it, its value will be zero. Even though there is high effort to procure.  I hope that clarifies your question of the exchange rate. It is determined by how much each party values the goods involved. "From my limited experience with foreign exchange... Money is a commodity.. people buy it and sell it like other products.. if ""money"" is in demand the price goes up.. this is the case when a countries stocks are hot, and you need to purchase that countries currency to buy that stock... I've also seen the currency rise on news and speculation.  Many years ago, I administered foreign receivables... My job was to settle letters of credit from Britain... I remember on one ocassion Margaret Thatcher said something to upset the markets.. her remark caused the price of the UK pound to fluctuate." You probably can get away with only updating the exchange rates once a day and specify that any prices quoted in units other than your home currency are estimates only. If you're planning to accept more than one currency as payment, I'd (a) see about whatever regulations there are for doing so, and (b) build in a nice spread for yourself if you're allowed to, since it is a service you're providing to your customers.  If you Google currency converter the first result is just that: a currency converter. Why do these fees exist? From a Banks point of view, they are operating in Currency A; Currency B is a commodity [similar to Oil, Grains, Goods, etc]. So they will only buy if they can sell it at a margin.  Currency Conversion have inherent risks, on small amount, the Bank generally does not hedge these risks as it is expensive; but balances the position end of day or if the exposure becomes large. The rate they may get then may be different and the margin covers it. Hence on highly traded currency pairs; the spread is less.  Are there back-end processes and requirements that require financial institutions to pass off the loss to consumers as a fee? The processes are to ensure bank does not make loss. is it just to make money on the convenience of international transactions? Banks do make money on such transactions; however they also take some risks. The Forex market is not single market, but is a collective hybrid market place. There are costs a bank incurs to carry and square off positions and some of it is reflected in fees.  If you see some of the remittance corridors, banks have optimized a remittance service; say USD to INR, there is a huge flow often in small amounts. The remittance service aggregates such amounts to make it a large amount to get a better deal for themselves and passes on the benefits to individuals. Such volume of scale is not available for other pairs / corridors. Because the standard contract is for 125,000 euros.  http://www.cmegroup.com/trading/fx/g10/euro-fx_contractSpecs_futures.html You don't want to use Microsoft as an analogy. You want to use non financial commodities. Most are settled in cash, no delivery. But in the early 80's, the Hunt brothers caused a spectacular short squeeze by taking delivery sending the spot price to $50. And some businesses naturally do this, buying metal, grain, etc. no reason you can't actually get the current price of $US/Euro if you need that much. This would effectively be currency speculation, betting that the Pound will be stronger vs. the Euro in November (or whenever) than it is today.  This would be a profitable transaction if the exchange fees are less than the swing between the two. In my (very limited) experience, exchange fees are going to be at least a few percent, and she's going to have to do the exchange twice if she wants to turn current Euros into Pounds and back into Euros later; that's at least a 6% hit.   I'd recommend against this.  While it's quite plausible for the two currencies to move more than 6% against each other in that time, it's also quite possible for them to move the other way, causing her a large loss.   The unfortunate thing about large, heavily traded things like GBP/EUR is that you're very unlikely to have some information that the big traders don't.  While lots of people think that the pound is going to become stronger, just as many people think that the Euro is going to be stronger.  These two camps are constantly bidding against each other, resulting in the 1.15 Pounds/Euro exchange rate as of this writing.  The current price and current direction that the line is moving in no way tells you what it's going to do next. If I understand your question, you're misunderstanding the buy/sell spread, and at least in this instance seem to be in an unfortunate situation where the spread is quite large. The Polish Zloty - GBP ideal exchange rate is around 5.612:1.  Thus, when actually exchanging currency, you should expect to pay a bit more than 5.612 Zloty (Zloties?) to get one Pound sterling, and you should expect to get a bit less than 5.612 Zloty in exchange for one Pound sterling.  That's because you're giving the bank its cut, both for operations and so that it has a reason to hold onto some Zloty (that it can't lend out).  It sounds like Barclay's has a large spread - 5.211 Buy, 5.867 Sell.  I would guess British banks don't need all that many Zloty, so you have a higher spread than you would for USD or EUR. Other currency exchange companies or banks, particularly those who are in the primary business of converting money, may have a smaller spread and be more willing to do it inexpensively for you.  Also, it looks like the Polish banks are willing to do it at a better rate (certainly they're giving you more Zloty for one Pound sterling, so it seems likely the other way would be better as well, though since they're a Polish bank it's certainly easier for them to give you Zloty, so this may be less true).  Barclay's is certainly giving you a better deal on Pounds for a Zloty than they are Zloty for a Pound (in terms of how far off their spread is from the ideal). The company says it's out of their control - it isn't. All they have to do is to INSTRUCT HSBC to send a certain amount of GBP, and then HSBC MUST send GBP.  Obviously the bank doesn't like that because they make money through the conversion. That's not your problem. When told to send GBP, they must send GBP.  Depending on what your relationship with that company is, you lost money because they didn't send the GBP. At the very least, they sent you four percent less in Euros than they should have sent you. So send them a bill for the difference. It's unfortunate that your bank charged for the conversion Euro to GBP, but fact is that less than the agreed amount arrived at your bank, and that's the responsibility of the sender. Yes.  When the currency of a country appreciates, it benefits some groups and disadvantages others.  In particular, exporters suffer when a currency increases in value relative to other countries.  In a country like the US, where exporters are small relative to the economy, this isn't a big deal.  In germany, where exporters make up a big part of the economy, a currency increasing in value leads to large numbers of layoffs and other negative net effects to the economy. At any instant, three currencies will have exchange rates so if I know the rate between A and B, and B to C, the A to C rate is easily calculated. You need X pounds, so at that moment, you are subject to the exchange rate right then. It's not a deal or bargain, although it may look better in hindsight if the currencies move after some time has passed. But if a currency is going to depreciate, and you have the foresight to know such things, you'd already be wealthy and not visiting here. My instinct says that there should be no difference. Your instincts are right. Your understanding of math is not so much. You sold $100K at the current price of 7500000RUB, but ended up buying at 3500000, you earned 3500000RUB. That's 100% in USD (50% in RUB). You bought 7500000RUB for the current price of $100K, but sold later for $200K. You earned $100K (100% in USD), which at that time was equal 3500000RUB. You earned 3500000RUB. That's 50% in RUB. So, as your instincts were saying - no difference. The reason percentages are different is because you're coming from different angles. For the first case your currency is RUB, for the second case your currency is USD, and in both cases you earned 100%. If you use the same currency for your calculations, percentages change, but the bottom line - is the same. "There's an ideological/psychological aspect of this too apart from the practical problems. Eurozone leaders keep saying the mantra: conversion to the euro is ""irreversible"". There are analogies of this in recent history, it reminds me of the soviet leaders and their belief that communism is where history ends. They genuinely thought that once a communist system is built up in a country, it would stay forever. They believed in the superiority of their system, among other things this lead to the isolation of the Soviet Union from the West and the start of the Cold War. Then, in 1956 they were proven wrong with the Hungarian revolution and while they tried to ""clean up"" the situation as fast as they could and forget about it, their downhill inevitably started.  Back to the present, you can easily see the importance of keeping Greece in the EZ. If Greece exits, the illusion of the irreversibility of the Euro is gone, and it would start to fall apart." The exchange rate between two currencies is simply the price that the most recent market participants were able to agree on, when trading. ie: if the USDCAD is 1.36, it's because the last trade that happened where someone bought 1 USD cost 1.36 CAD. There is no one person/organization which 'decides' the rate between two currencies. The rate moves you see is just the reality of money changing hands as people in various situations trade currencies for various reasons. Just like with stocks or any other market product, foreign exchange rates can fluctuate wildly based on many things. It is very difficult to forecast where rates will go, because the biggest changes in rates can often be unpredictable news events. For example, when Brexit happened, the value of the GBP plummeted relative to other currencies, because the market traders had less faith in the UK economy, and therefore weren't willing to pay as much to buy GBP. See more here: https://money.stackexchange.com/a/76482/44232. There is a very high level of risk in the foreign exchange market; for your sake, don't get involved in any trading that you do not well understand, first. "Any clearing/ legal experts out there?  Is this possible- and if so, is it that big of a deal? Here are my thoughts:  1. The EU is right to request euros to be cleared on ""home soil"" for sovereignty reasons since 2/3s of euro currency is cleared in London.  2. Moving euro clearing back to the eurozone... would just mirror US regulations.  Whats the big deal?"