What Is an Exchange Rate?
An exchange rate is the price of one currency expressed in another, such as how many euros one US dollar buys. Most major currencies have floating rates that change continuously with supply and demand, influenced by interest rates, inflation, trade, and market expectations.
Mid-Market Rate vs. Offered Rate
Banks and exchange services often offer a rate less favorable than the mid-market rate and may add fees; the difference is the real cost of the conversion.
Calculating the Markup
(Mid-market rate − offered rate) ÷ mid-market rate × 100 gives the percentage markup.
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.