How to calculate inverse currency exchange rate ?
I would like ask how to calculate the exchange rate of the second currency in a pair (inverse currency rate).
For example:
If I know the exchange rate of currency pair USD/EUR, how do I get the exchange rate of EUR/USD ?
The calculation of inverse currency exchange rate is quite simple. It is needed to divide 1 by the current exchange rate.
If exchange rate of USD/EUR is 0,892343 then the exchange rate of EUR/USD is 1 / 0,892343 = 1,12065
How should I calculate the exchange rate when there are three currencies (two currency pairs) ?
For example, if I know the exchange rate of USD/GBP and EUR/GBP, how can I calculate the exchange rate of USD/EUR ?
The best way how to calculate currency exchange rate between 3 currencies, is to put the currency pairs in correct order and then multiply the values. If currency pairs are not in the correct order, you have to calculate the inverse currency exchange rate.
When you have:
USD/GBP - 0.8351
EUR/GBP - 0.8736
To calculate USD/EUR, you need to have currency pairs in this order:
USD/GBP - 0.8351
GBP/EUR - 1.1446 (calculated inverse exchange rate 1 / 0.8736)
Then just multiply the exchange rates:
USD/EUR = 0.8351 * 1.1446 = 0.9558