We monitor market rates every day, to bring you great value on your travel money.
Whether you are looking to convert your pounds to dollars, euros, or any other currency, simply choose the currency you need below to see our rates of the day.
Exchange rates are influenced by banks and trading institutions and the volume of currency they are buying and selling at any given time. Currencies are traded (bought and sold) daily around the world.
One currency can be purchased by another currency through banking institutions or on the open market. The volumes of currencies traded are increased and decreased depending on the attractiveness of any particular currency, which depends on a multitude of factors such as political stability, economic strength, government debt and fiscal policy among others.
Government central banks also can set a currency at a constant price through a method called pegging, which essentially tethers the value of one currency to another. The value (or price) of a currency is determined by its traded volume. If a currency is competitively priced, traders will buy the currency, essentially driving up its value. If a currency is not competitively priced, traders may avoid buying, or even sell it, essentially driving down its value.
How to read exchange rates
Foreign exchange can be confusing, so to help break through the confusion, here are some common terms associated with currency:
Buy rate – This is the rate at which we buy foreign currency back from you into your local currency. For example, if you were returning from America, we would exchange your US dollars back into British pounds at the buy rate of the day.
Commission – This is a common fee that foreign exchange providers charge for exchanging one currency with another.
Cross rate – This is the rate we give to customers who want to exchange currencies that do not involve the local currency. For example, if you want to exchange Australian dollars into US dollars.
Currency Pair - This the the relationship between two country's currencies. It is often denoted like this: GBP/USD, EUR/JAP, AUD/INR
Holiday money rate or tourist rate – This is another term for a sell rate.
Sell rate – This is the rate at which we sell foreign currency in exchange for local currency. For example, if you were heading to Europe, you would exchange British pounds for euros at the sell rate.
Spot rate – This is known more formally as the ‘interbank’ rate. It is the rate banks or large financial institutions charge each other when trading significant amounts of foreign currency. In the business, this is sometimes referred to as a ‘spot rate
Spread – This is the difference between the buy and sell rates offered by a foreign exchange provider such as us.
Exchange Rates FAQ's
Why do currency exchange rates fluctuate?
Currencies constantly move up and down against each other as financial markets change. These movements can be caused by supply and demand, as well as by political and economic events.
Why are tourist money exchange rates not the same as the market spot rate?
The market (or spot) exchange rate, is the rate at which banks exchange currencies. There are a lot of processes and people involved in providing currency into your hands. There is a cost to doing this, which means that the value of the currency is affected to cover all of said cost.
At XTOB SUPPORT SERVICES, we work to provide you with the best value on your foreign currency as possible. We are constantly striving to improve our systems and processes to make them more efficient, meaning that you get the best value for your travel money exchange rates from us.
Does it pay to shop around and compare rates?
There are a lot of foreign currency providers in NIGERIA, offering you a range of products and services. With so much choice, it means that you can spend time to find the best exchange rate in the market. However, there is usually very little difference; it can be just a matter of pence.
Not sure if it is the right time to buy your currency? Let us do the hard work by monitoring the rates for you! We will email you when your chosen currency hits the rate you need.
*We compared the average cost of sending money abroad from the NIGERIAN with XTOB– in euros or US dollars across a range of values – against the average costs of sending equivalent sums abroad using the online services of leading money transfer providers in the UK. The price data used for the purpose of this analysis was obtained via online research between 1st June 2017 and 30th June 2017.
Spot Exchange Rate vs Forward Exchange Rates
Big foreign exchange decision?
There are two different types of currency exchange rates. The first one and simplest to explain is the spot exchange rate. The spot exchange range is simply the current exchange rate as opposed to the forward exchange rate. Forward exchange rate essentially refers to an exchange rate that is quoted and traded today but for delivery and payment on a set future date. Sometimes, a business needs to do foreign exchange transaction but at some time in the future. For example, a British company might make a sale of its goods internationally (in this case we will say a European country) but will not receive payment for at least one year. So how is it able to price its products or goods without knowing what the foreign exchange rate, or spot price as it is called, will be between the United States dollar (USD) and the Euro (EUR) 1 year from now? It can do so by entering into a forward contract that allows it to lock in a specific rate in 1 year so that they can agree upon a set exchange rate without knowing exactly what it will be.
A forward contract is an agreement, usually with a bank, to exchange a specific amount of currencies sometime in the future for a specific rate—the forward exchange rate. Calculating this forward exchange rate is the difficult part because how can you predict the future?? Obviously, it can't be decided based on the exchange rate in a year’s time because it is impossible for people to predict what that will be. All that is currently known is the spot exchange rate, today, but a forward price cannot simply equal the spot price, because the money could have been securely invested to earn interest with organisations such as banks, so the future value of the amount is bigger than its current value and they would have potentially lost money. The use of these forward contracts are generally by bigger transactions and firms so the amount lost in possible interest can often be quite substantial.
A fair way of doing would be if the current exchange rate of a particular currency with respect to a base currency equals the current value of the currencies, then the forward exchange rate should equal the future value of the quote currency and the future value of the base currency, because, as we shall see, if it doesn't, then an arbitrage opportunity arises. So the future value of a currency is the present value of the currency + the interest that it earns over time in the country of issue. The mathematical symbol for this way of calculating the Future Exchange rate would be: FV = P (1+rn ) In this equation, the FV stands for the future value of the currency or as earlier discussed, the future exchange rate. P refers to the principal. r refers to rate of interest per year and of course n, stands for the number of years.