Exchange Rates and Currency Exchange

When working with currency exchange, probably the trickiest element is that you have to choose one of two inverse exchange rates depending on which way the money conversion is taking place. In any currency situation, it is important that you take the time to understand the basis on which the currency rate is being expressed. Typically, exchange rates are expressed on a per-unit basis in the country's domestic currency. For example, Canadians express the US dollar exchange rate on a per \(C$\) basis. From the cross-rate table, that exchange rate is \(1.0218\). In contrast, Americans express the Canadian dollar exchange rate on a per \(US$\) basis, or \(0.9787\).