Euro Currency Exchange

Facts and figures about the Euro

Quick history

The euro (€) is the official currency of the eurozone, which consists of 17 of the 27 member states of the European Union. Today, euros are accepted in Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. The euro was introduced to world financial markets as an accounting currency on 1 January 1999, with euro coins and banknotes entering circulation on 1 January 2002.

The euro was established by the provisions in the 1992 Maastricht Treaty and, to participate in the currency, member states are meant to meet strict criteria, such as a budget deficit of less than three per cent of their GDP, a debt ratio of less than sixty per cent of GDP, low inflation and interest rates close to the EU average.

In the Maastricht Treaty, the United Kingdom and Denmark were granted exemptions per their request from moving to the stage of monetary union which would result in the introduction of the euro.

Members

The eurozone, ie the region that uses the euro as its sole currency, consists of: Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.

The single currency is also used in other countries and regions and it is calculated that the euro is used by approximately 332 million people.

Some of these regions include:

Monaco, San Marino and Vatican City, all having the right to mint their own coins
Saint-Pierre-et-Miquelon off the coast of Canada, and Mayotte in the Indian Ocean are outside the EU but have been allowed to use the euro as their currency
With the adoption of the euro in Cyprus, the Sovereign Base Areas of Akrotiri and Dhekelia also adopted the euro
Andorra has been negotiating an agreement about having the euro as official currency and minting its own euro coins. An agreement was signed on 30 June 2011, which is planned to allow Andorra to mint coins from 2013 onwards
Montenegro and Kosovo have also used the euro since its launch, as they switched to the euro when the mark was replaced but have no formal agreement with the ECB
The single currency is also gaining increasing international usage as a trading currency in Cuba, North Korea and Syria.

Administration

The euro is managed and administered by the Frankfurt-based European Central Bank (ECB) and the Eurosystem (composed of the central banks of the eurozone countries).

The ECB is an independent central bank and has sole authority to set monetary policy, much like the UK’s Bank of England. An example of monetary policy would be setting interest rates.

The Eurosystem participates in the printing, minting and distribution of notes and coins in all member states, and the operation of the eurozone payment systems.

Since 1 January 2002, the national central banks (NCBs) of the eurozone countries and the ECB have issued euro banknotes on a joint basis. Euro banknotes do not show which central bank issued them and NCBs are required to accept euro banknotes put into circulation by other Eurosystem members.

Interesting facts

The euro is the second largest reserve currency as well as the second most traded currency in the world after the United States dollar.

As of February 2012, with more than €890 billion in circulation, the euro has the highest combined value of banknotes and coins in circulation in the world, having surpassed the US dollar.

Based on International Monetary Fund estimates of 2008 GDP and purchasing power parity among the various currencies, the eurozone is the second largest economy in the world.

European sovereign debt crisis

Setting the scene: The introduction of the euro has decreased the interest rates of most member countries, in particular those with a weak currency prior to joining the euro. The countries whose interest rates fell most as a result of the euro were Greece, Ireland, Portugal, Spain and Italy, thereby making it easier for the banks and the countries themselves to borrow significant amounts (above the 3% of GDP budget deficit imposed on the eurozone initially) and increase their public deficit and levels of privately held consumer debt.

Following the financial crisis in 2008, governments in these countries found it necessary to bail out or nationalise their privately held banks in order to prevent systemic failure of the banking system. This further increased the already high levels of public debt to a level the markets began to consider unsustainable, via increasing government bond interest rates, producing the ongoing European sovereign-debt crisis.

Where are we now?

Following the US and subsequent global financial crisis in 2008, fears of a sovereign debt crisis developed in 2009 among fiscally conservative investors concerning some European states. This included eurozone members Greece, Ireland and Portugal and also some EU countries outside the area.

In the EU, especially in countries where sovereign debts have increased sharply due to bank bailouts, a crisis of confidence has emerged with the widening of bond yield spreads and risk insurance on credit default swaps between these countries and other EU members, most importantly Germany.

To be included in the eurozone, the countries had to fulfil certain convergence criteria, but the meaningfulness of such criteria were diminished by the fact they have not been applied to different countries with the same strictness.

Sterling vs Euro: a view by charts

This section has recorded the performance of sterling (GBP) against the euro (EUR) in chart form, looking at different periods.

GBP/EUR - 1 YEAR*

Looking at the one year graph, sterling has made significant gains against the euro, climbing from a rate of €1.11 to almost €1.25 today*. This is a substantial rise and has mainly been caused by the ongoing debt crisis in the eurozone and investors flooding out of the single currency into currencies which are perceived to be safer. Accordingly, sterling has benefited from this exodus as the markets are more confident in the UK’s approach to dealing with the debt crisis.

GBP/EUR - 5 YEARS*

Over five years the remarkable thing to note is that, at one point, you could get nearly €1.5 for every pound. That meant if you were taking away £500 on your holiday for spending money, you would get €750. The value of sterling has dramatically decreased since these heady times and the main cause was the global financial crisis in 2008. The effects on sterling in the build up to the crash materialised towards the end of 2007 and it slowly damaged the rate of sterling against the euro at a steady rate up to November 2008.

However, December 2008 marks a low point for sterling as the rate dropped from €1.21 at the beginning of November to €1.04 at the start of December. Clearly the markets had fully factored in the debt crisis and its impact on the UK economy, with investors flooding out of sterling looking to invest into safer currencies.

Between January 2009 and May 2010, the rate between sterling and euro has traded between €1.1 and €1.2, sometimes dipping below and above these levels. We can look at interest rate cuts, the introduction of quantitative easing and general economic performance as a way of explaining this rise and fall. However, from September 2011 onwards, we have seen a vast improvement in sterling’s performance against the euro, explained by the fact that the markets were beginning to become more confidence in the UK’s approach to dampening the debt crisis. In contrast, the eurozone has been plagued by crisis in Greece and a lack of a coordinated approach to dealing with the debt crisis.

*Correct on 30/05/12. For more information, get in touch with our currency specialists or open your free account today.

US dollar currency exchange

Facts and figures about the USD

The United States dollar is the official currency used in the United States. It is also used across the world, even in countries that have their own denomination, as it’s the world’s foremost reserve currency.

Quick history

The word ‘dollar’ is one of the words in the first paragraph of Section 9 of Article 1 of the U.S. Constitution, which established a mint and regulation of the coins of the United States – the Coinage Act of 1792.

In this section, ‘dollars ’are mentioned as a reference to the Spanish milled dollar, a coin that had a monetary value of 8 Spanish units of currency. The first dollar coins issued by the United States Mint (founded 1792) were similar in size and composition to the Spanish dollar.

Administration

The United States Mint is in charge of producing the nation’s coins, while the Bureau of Engraving has printed banknotes since 1914.

The U.S. dollar bill uses the decimal system, consisting of 100 equal cents (symbol ¢). Denominations equal to or less than a dollar tend to be produced in coins, while denominations equal to or greater than a dollar are printed as bank notes.

Eight times a year, the Federal Reserve’s – the Fed being the US equivalent of our Bank of England – 12-person Federal Open Market Committee meet to determine US monetary policy. This involves the Fed setting the main interest rate, the most important variable defining the value of the US dollar.

The Federal Reserve can also affect the value of the dollar is buy increasing the money supply, by buying securities (such as US Treasury Bonds) from banks in exchange for dollars – also known as quantitative easing. Conversely, it will sell securities to the banks in exchange for dollars, to take dollars out of circulation.

Additionally, many commodities are priced in dollars, such as gold, so when the dollar rises commodity prices fall.

Does anyone else use the US dollar?

The US dollar is the world’s largest reserve currency. So you could be in Vietnam and while they have their own currency, the Vietnamese Dong, you can also freely spend US dollars, which will be widely accepted as it’s a more stable currency and therefore highly valued.

Nonetheless, there are a few countries besides the US that use the U.S. dollar as their official currency.

Ecuador, El Salvador and East Timor all adopted the US dollar independently and former members of the US-administered Trust Territory of the Pacific Islands - namely Palau, the Federated States of Micronesia and the Marshall Islands - decided that despite their independence they wanted to keep the U.S. dollar as their official currency.

Bermuda, the Bahamas and Panama have their own currency and they can be freely exchanged at a 1:1 ratio for the U.S. dollar.

Interesting facts

The Spanish, US silver dollars, and Mexican silver pesos circulated side by side in the United States, and the Spanish dollar and Mexican peso remained legal tender until 1857.

The dollar is considered the standard unit of currency in commodity markets across the globe (such as gold and oil).

The '$’ sign is thought to be the result of a late 18th-century evolution of the scribal abbreviation "ps" for the peso. The 'p' and the 's' eventually came to be written over each other giving rise to $.

Another popular explanation for the origin of the $ sign comes from the Pillars of Hercules on the Spanish Coat of Arms on the Spanish dollars that were minted in the New World mints in Mexico City, Potosí, Bolivia, and in Lima, Peru. These Pillars of Hercules take the form of two vertical bars (||) and a swinging cloth band in the shape of an 'S'.

There are six different official coins in circulation and there have been 17 different coins in circulation at some point since 1792.

Notes in denominations of $500, $1,000, $5,000, $10,000, and $100,000 were all produced at one time.

The currency coins as we know them today did not get the faces they currently have until after the early 20th century; before that the ‘heads’ side of the coins used profile faces and striding, seated, and standing figures from Greek and Roman mythology and composite native Americans. The last coins to be converted to profiles of historic Americans were the dime (1946) and the dollar (1971).

'Greenback' is another nickname for the US dollar and it originally applied specifically to the 19th century Demand Note dollars created by Abraham Lincoln to finance the costs of the Civil War for the North. The original note was printed in black and green on the back side.

High-denomination bills ($500-$100,000 notes) are technically legal tender, but were last printed in 1945 and officially discontinued on July 14, 1969 by the Federal Reserve System. President Richard Nixon halted the circulation of these high-denomination bills in 1969 by Executive Order, in an effort to fight organised crime.

Sterling vs US dollar: a view by charts

This section looks at the performance of sterling (GBP) against the US dollar (USD) over one and five years. This is meant to serve as a snapshot and, if you want to know more, please call our analyst or sign up to our regular currency reports.

GBP/USD - 1 YEAR

Infographic -currency -services -03

The chart illustrates that sterling made a strong start to 2012, peaking at $1.623 at the end of April amid positive global economic sentiment. However, August 2011 ushered in an escalation of the eurozone debt crisis, which has seen demand for the safe-haven greenback increase significantly, despite ongoing speculation that the US Federal Reserve is edging towards introducing another round of quantitative easing (QE3).

However, since the highs of April, sterling has lost ground to the US dollar as America’s economic recovery is on a firmer footing and investors have been increasingly looking at the US dollar as the true safe-haven currency as they are worried about the impact of the problems in the eurozone onto the UK.

GBP/USD - 5 YEARS

Infographic -currency -services -04

November 2007 was a particular high point for sterling against the dollar. However, the US dollar began to appreciate against sterling and really began to benefit in the wake of the financial crisis as investors looked to the safe-haven US dollar, unsure of where the UK economy was heading as a result of the global recession.

Sterling did receive some respite post-March 2009, as global risk appetite staged a minor recovery. However, amid bleak UK economic prospects and increased safe-haven demand as a result of the eurozone debt crisis, sterling has been unable to make any sustained moves away from the $1.50-1.60 area where GBP/USD currently trades.

For more information, get in touch with our currency specialists or open your free account today.

Canadian dollar (CAD) Currency Exchange

Facts and figures about the The Canadian dollar

The Canadian dollar (sign: C$; code CAD) is the currency of Canada and is in the top seven most traded currencies in the world. The currency dates back to 1857, when it replaced the Imperial British Pound, creating a decimal monetary system based on the US dollar, and so forging closer ties and trade with its close neighbour.

Another Act of Parliament was introduced in 1971, tying up all of the currencies of the various provinces and replacing them with a common Canadian dollar.

Value and exchange

The Bank of Canada (BoC) has no specific target value for the Canadian dollar, allowing market conditions to determine its worth. Occasionally, however, the BoC makes minor attempts to influence its value through monetary policies such as adjusting exchange rates.

During the Second World War, the Canadian dollar exchange rate was fixed at C$1.10 = US$1.00. This was changed to parity in 1946, returning to the peg in 1949.

Unlike other currencies in the Bretton Woods system in which values were fixed, the Canadian dollar was allowed to float from 1950 to 1962. Between 1952 and 1960, the Canadian dollar traded at a slight premium over the US dollar, reaching a high of US$1.0614 on August 20th 1957.

The Canadian dollar returned to a fixed exchange rate only in 1962, when the dollar was pegged at C$1.00 = US$0.925. This lasted until 1970, after which the currency's value was floated to guard against inflation.

During the US technological boom of the 1990s, the Canadian dollar fell in value against its American counterpart. Since then, its value against all major currencies has risen, due partly to high prices for Canada’s export commodities (especially oil).

Historically, on world markets, the Canadian dollar tends to move in tandem with the US dollar. Canadians are especially interested in the value of their currency against the US dollar, since almost 85% of their exports and 57% of their imports are traded over the border with their close neighbour. Understandably, the most popular Canada dollar exchange rate is the US$ to C$ rate.

On the money

The British gold sovereign continued to remain legal tender right up until the 1990s when a sovereign was worth C$4.862.

Canadians often refer to a dollar as a "buck". The term derives from a coin struck by the Hudson Bay Company during the 17th century. Its value was deemed equal to the pelt of a male beaver, ie a "buck".

The Canadian dollar is often referred to as the ‘loonie’ after the common loon – a water-based bird featured on the back of the dollar coin. This replaced the dollar bill in 1987.

The standard set of designs for Canadian coins typically incorporates wildlife symbols on the reverse and an image of the British Queen, Elizabeth II, on the obverse. However, some coins bearing the head of George VI still remain in circulation.

In 2012, Iceland began to consider adopting the Canadian dollar as a stable alternative to the Icelandic Krona.

Does anyone else use the US dollar?

Since the Canadian dollar is considered to be a benchmark currency, a number of central and commercial banks keep Canadian dollars as a reserve currency.

Like Australia, the BoC began issuing a new series of bank notes printed on a polymer material. These are more durable and include new security features offering better protection against counterfeiting.

Sterling vs Canadian Dollar: a view by charts

These charts show the performance of sterling (GBP) against the Canadian dollar (CAD) over the last year, as well as the last five years. This is just a snapshot — if you’d like to know more, please call our analyst or sign up to our regular currency reports.

GBP/CAD - 1 YEAR*

The pound has weakened against the Canadian dollar over the past year. The Canadian dollar is a commodity currency and high oil prices in particular have been particularly supportive of it. The Bank of Canada’s 1.50% base rate also offers a much higher yield than the Bank of England’s 0.50% rate and is one of the few major global central banks looking to raise interest rates in the next year or so. This is because, in terms of economic fundamentals, the Canadian economy is in comparatively excellent shape, much better than the UK, which has been reflected in a downtrend in the GBP/CAD rate over the past year.

GBP/CAD - 5 YEARS*

As you can see, the days of two Canadian dollars to the pound are long gone. The effects of the UK recession and the Bank of England’s quantitative easing programme saw this pair post record lows below 1.49 in May 2010. The second-tier, safe-haven status that the pound has acquired has helped the pound avoid further losses below this point, fluctuating within a range of 1.53 - 1.65 for the past two years. We are currently heading towards the bottom of this range and, for as long as UK economic growth remains so weak, it is difficult to see this pair break out of this range to the upside any time soon.

*Correct on 02/08/12. For more information, get in touch with our currency specialists or open your free account today.

Australian dollar (AUD) Currency Exchange

Facts and figures about the Aussie dollar

The Australian Dollar is the currency of the Commonwealth of Australia and is one of the most traded currencies in the world, alongside the United States Dollar, Japanese Yen, the Euro, British Pound Sterling and Canadian Dollar.

In 1966, Australian currency changed, replacing its pounds shillings and pence with a new decimal denomination – today known as the Aussie Dollar (sign: $; code: AUD).

History and administration

The new currency’s rate of conversion was two dollars per Australian pound and the exchange rate was pegged to the pound sterling at a rate of $1 = 8 shillings ($2.50 = UK £1).

However, in 1967, Australia effectively left the Sterling Area when sterling was devalued against the US dollar and the Australian Dollar did not follow. Consequently, the Aussie dollar maintained its peg to the US dollar at the rate of A$1 = US$1.12.

The Aussie dollar and the exchange rate

Prior to 1983, Australia maintained a fixed exchange rate. The first peg was between the Australian and British pounds and this reflected its historical ties as well as the stability in value of the British pound.

In 1971 however, with the breakdown of the Bretton Woods system, as well as the conversion of the Australian pound to the Aussie Dollar, the country converted the traditional peg to a fluctuating rate against the US dollar. At the end of 1983, Australia floated its dollar with the exchange rate reflecting the balance of payments and other market drivers.

According to XE.com, their currency rankings show that the most popular Australia Dollar exchange rate is the AUD to GBP (sterling) rate.

The Aussie Dollar accounts for approximately 5% of worldwide foreign exchange transactions. This is a significant amount of trade and the AUD is popular among currency traders for a number of reasons - the nation’s relative economic and political stability; the lack of government intervention in the foreign exchange markets and greater exposure to Asian economies. So, the AUD seems to offer diversification benefits in a portfolio containing the major world currencies.

On the money

The Aussie Dollar is also used by Christmas Island, Cocos (Keeling) Islands, and Norfolk Island, as well as the independent Pacific island states of Kiribati, Nauru and Tuvalu.

When the new currency was being introduced in the 1960s, there was some lively debate on what name should be used. Proposed names included ‘Oz’, the ‘Boomer’, the ‘Roo’, the ‘Kanga’, the ‘Emu’ and the ‘Dinkum’, to name but a few. But, in 1965, the Prime Minister, Sir Robert Menzies, was a monarchist and used his influence to name the currency the ‘Royal’. The new choice of name, however, proved unpopular and it was later dropped in favour of the Dollar.

The initial 50-cent coins contained high amounts of silver but were withdrawn after a year for fear that the intrinsic value of the silver content would exceed the face value of the coins. With a mass of 15.55 grams and a diameter of 31.51 mm, it is one of the largest sized coins used in the world today.

The first polymer banknotes were issued in 1988 by the Reserve Bank of Australia to commemorate the bicentenary of European settlement in Australia. All Australian notes are now made of polymer which means their very durable and incorporate many security features not available to paper banknotes – which makes counterfeiting much more difficult.

Sterling vs Aussie dollar: a view by charts

The following charts look at the performance of sterling (GBP) against the Aussie dollar (AUD) over the last year, as well as the last five years. This is meant to serve as a snapshot, but if you want to know more, please call our analyst on 0207 201 0561, or sign up to our regular currency reports.

GBP/AUD - 1 YEAR

Sterling has had a tough time of it against the Australian dollar in the past year. The Australian has maintained robust growth, while the UK economy has entered a double-dip recession. The AUD has become increasingly popular with reserve managers at global central banks, such as the German Bundesbank and Swiss National Bank, as they re-evaluate the safety profiles of various currencies amid ongoing turmoil in the financial markets. The AUD’s high interest rate and strong economy has ensured that this pair is not far off its all-time lows close to 1.45. This is great if you are selling AUD to buy sterling but not good news if you are purchasing AUD.

GBP/EUR - 5 YEARS

Looking at the chart, we can see a significant trend, where sterling peaks against the ausie dollar in April 2009 but thereafter, the AUD has made significant gains.

The main reason to explain why investors have flooded out of sterling in favour of the Aussie dollar, with the trend continuing right up to current times, can be explained by the consequences of the global economic crash in the Autumn of 2008.

As the world sought to recover from the credit crisis, investors were less confident that the eurozone, and by default the UK, would weather the storm and therefore sought solace in the Aussie dollar.

General economic theory suggests high interest rates and high levels of growth help increase the value of a currency, and the Aussie dollar during the past five years has been boosted by high interest rates and relatively-steady GDP growth — especially when you compare it against sterling.

In addition, the value of the Aussie dollar has benefited from the knock-on effects of China’s booming economy.

For more information, get in touch with our currency specialists or open your free account today.

Czech Koruna Currency Exchange

Facts and figures about the Czech Koruna

Quick history

The Czech Koruna, or Czech Crown as it is often known, is the currency of the Czech Republic. The currency was established on 8th February 1993, replacing the Czechoslovak Koruna following the dissolution of Czechoslovakia, which became the Czech Republic and the Slovak Republic. The Czech Koruna was instantly valued at considerably more than the Slovakian Koruna.

The ISO code used for the Koruna is 'CZK'.

Coins circulate in denominations of 1, 2, 5, 10, 20 and 50 'korun', which all feature the Czech lion on the observe, with the reverse featuring the value.Czech banknotes in circulation are in denominations of 100, 200, 500, 1000, 2000 and 5000 korun, which feature well-known Czech individuals on the obverse and abstract compositions on the reverse. Modern protective elements can be found on all the banknotes. They are issued by the Czech National Bank.

A Czech korun is divided into 100 smaller units called 'hellers'.

Interesting facts

The Czech Republic planned to replace the Koruna with the euro by 2012, but this plan was suspended in 2007.
Although the country is economically well-positioned to adopt the euro, there is considerable opposition to the move within the Czech Republic. According to a survey conducted in January 2011, only 22% of the Czech population was in favour of replacing the Koruna with the euro.
Some stores, restaurants and hotels accept payment in euros, especially in city centres such as Prague, but the exchange rate may not be very good.

For more information, get in touch with our currency specialists or open your free account today.

Hong Kong dollars (HKD) Currency Exchange

Facts and figures about the The Hong Kong dollar

Quick history

The Hong Kong Dollar (HKD) is the currency of Hong Kong and is divided into 100 cents just like its American counterpart. The Hong Kong Dollar was first introduced in 1895 by the British. At this time, it was equal to the Mexican Trade Dollar (which up until 1895 had been the principal medium of exchange). When Japan occupied Hong Kong during WWII, the Hong Kong dollar was withdrawn from circulation and Japanese Yen were declared the only legal currency. Although the Hong Kong Dollar was no longer valuable, residents stashed their now worthless money and, after the war was over, people began to exchange left over Japanese Yen for Hong Kong Dollars at a rate of 100 Yen = 1 Dollar. Soon after, Hong Kong resumed using the Dollar and still uses it today.

The HKD has been pegged to the USD over the past 30 years, fluctuating around or just below the 7.80 level. The Hong Kong Monetary Authority is charged with maintaining exchange rate stability through the linked exchange rate system. There has been increasing debate over whether the HKD should be managed more flexibly, whether that is against the US Dollar or the Chinese Yuan. The Hong Kong Monetary Authority has resisted such a change thus far.

As of 18 May 2005, in addition to the lower guaranteed limit, a new upper guaranteed limit was set for the Hong Kong dollar at 7.75 to the US Dollar. The lower limit has been lowered from 7.80 to 7.85 (the Hong Kong Monetary Authority indicated this move is to narrow the gap between the interest rates in Hong Kong and those of the United States). A further aim of allowing the Hong Kong dollar to trade in a range is to avoid the HK dollar being used as a proxy for speculative bets on a renminbi revaluation.

The Basic Law of Hong Kong and the Sino-British Joint Declaration provide that Hong Kong retains full autonomy with respect to currency issuance. Currency in Hong Kong is issued by the government and three local banks under the supervision of the territory's de facto central bank, the Hong Kong Monetary Authority. Bank notes are printed by Hong Kong Note Printing Limited.

Interesting facts

A bank can issue a Hong Kong Dollar only if it has the equivalent exchange in US Dollars on deposit. The currency board system ensures that Hong Kong's entire monetary base is backed with US Dollars at the linked exchange rate. The resources for the backing are kept in Hong Kong's exchange fund, which is among the largest official reserves in the world. Hong Kong also has huge deposits of US dollars, with official foreign currency reserves of 281.7 billion USD as of October 2011.
The HKD is the 8th most traded currency in the world.
The HKD’s Dollar peg was introduced to stop the currency from collapsing amid political tensions between China and the UK over the city of Hong Kong.
In 2007, Jim Rogers, a former partner in George Soros's Quantum Fund, said the Government should abolish the Hong Kong Dollar and adopt the Yuan as the official currency of the territory when the renminbi is freely convertible (the renminbi is not yet freely convertible). However, in the same year, Rogers changed his position and now believes the Hong Kong Government should adopt the renminbi despite the fact that it is not yet freely convertible: "This is 2007; I don't know why the Hong Kong Dollar exists any more … You have a gigantic neighbour who is becoming the most incredible economy in the world." Rogers also believes the renminbi is going to replace the US dollar as world reserve currency.

For more information, get in touch with our currency specialists or open your free account today.

Danish Krone Currency Exchange

Facts and figures about the Danish Krone

Quick history

The Danish Krone is the legal tender of Denmark, Greenland and the Faroe Islands. It has been the official currency since 1st January 1875. The Krone is denoted by the ISO code ‘DKK’ and is also known as the Danish Crown, which is the English translation of the word ‘Krone’. The Krone was established by the Scandinavian Monetary Union and was used by Denmark, Norway and Sweden until the Union collapsed in 1914 when the gold standard was abandoned. Denmark, Sweden and Norway all decided to keep the names of their respective and now separate currencies.

The Krone is now pegged to the euro via the European Exchange Rate Mechanism II and was previously pegged to the German Mark – it is relatively stable therefore. One Danish Krone is made up of 100 ‘ore’.

The design of the coin series is intended to ensure that the coins are easy to distinguish from each other. The series is therefore divided into three sequences, each with its own metal colour. This division into colours has its roots in history. In earlier times, the value of the coins was equivalent to the value of the metal from which they were minted: gold was used for the coins of the highest denominations, silver for the next highest, and copper for the lowest coin denominations. This correlation between colour and value has been retained in the present coin series. The 50-ore coins are thus minted from copper-coloured bronze, the 1-, 2- and 5-Krone coins from a silver-coloured cupro-nickel alloy, and the 10- and 20-Krone coins from golden aluminium bronze.

The process of designing the banknotes was initiated in 2006 by the Danish National Bank. The theme of the banknotes is Danish bridges and the surrounding landscapes, or details from these landscapes. The artist Karin Birgitte Lund chose to interpret this theme in two ways: bridges as links between various parts of Denmark and as links between the past and the present. The present is represented by the bridges, and the past by five distinctive prehistoric objects found near the bridges. Among the new security features is a window thread with a moving wave pattern. Another feature is a new, sophisticated hologram that reflects light in different colours. The new banknotes also have traditional security features such as the watermark and the hidden security thread.

The Danish coinage in the currency is minted and the banknotes are printed by the Danmarks Nationalbank, the central bank of Denmark, which has the sole authority to manage the flow of currency in the country.

Interesting facts

For almost 1,000 years, Danish kings – with a few exceptions – have issued coins with their name, monogram and/or portrait.
Denmark rejected the euro in a referendum in 2000.
The Danish Krone accounts for around 0.6% of average daily turnover in the currency markets.
Some of the banknotes have figurative meanings, with the 100-Krone note sometimes referred to as a 'hund' (dog), a shortening of the word 'hundrede'(a hundred). The 500-Krone note can be referred to as a 'plovmand' (ploughman) because previous circulations of the note featured a picture of a man with a plough. The 1000-Krone note, too, can be referred to as a 'tudse' (toad), taken from a wordplay on the word 'tusinde' (meaning a thousand). The 1000-Krone note may also be referred to as an 'egern' (squirrel) because of previous circulations of the note featuring a squirrel.

For more information, get in touch with our currency specialists or open your free account today.

Swiss Franc (CHF) Currency Exchange

Facts and figures about the Swiss Franc

Quick history

The Swiss Franc is the official currency of Switzerland, Liechtenstein and the Italian exclave of Campione d'Italia. The currency is commonly referred to by its nickname, the 'Swissie'. The Swiss National Bank issues Swiss banknotes, while the federal mint, Swissmint, issues coins. Banknotes are available in 10, 20, 50, 100, 200 and 1,000 franc denominations. The Swiss franc can be subdivided into hundredths known as 'rappen' in German, 'centime' in French, 'centesimo' in Italian and 'rap' in Rhaeto-Romanic.

The current, eighth, series of banknotes was designed by Jörg Zintzmeyer around the theme of the arts and was released in 1995. In addition to its new vertical design, this series was different from the previous one on several counts – probably the most important difference from a practical point of view was that the seldom-used 500 franc note was replaced by a new 200 franc note.

The ISO code of the currency used by banks and financial institutions is 'CHF', although 'Fr' or SFr' is used by most businesses and advertisers.

In 1798, the Helvetic Republic introduced a currency based on the Berne thaler, and this franc was issued until the end of the republic in 1803. Although 22 cantons and half-cantons issued coins between 1803 and 1850, less than 15% of the money in circulation in Switzerland in 1850 was locally produced, with the rest being foreign, mainly brought back by mercenaries. In addition, some private banks also started issuing the first banknotes, so that, in total, at least 8,000 different coins and notes were in circulation at that time, making the monetary system extremely complicated!

The Swiss franc suffered its sole devaluation, on 27 September during the Great Depression. The currency was devalued by 30% following the devaluations of the British Pound, US Dollar and French Franc.

In 2011, the Swiss National Bank intervened in the currency markets to weaken the Swiss Franc, as its excessive strength was damaging the Swiss economy. It is now defending a 'floor' in the EUR/CHF exchange rate, ensuring the rate does not dip below the 1.20 level.

Interesting facts

The Swiss Franc is the only version of the Franc that is still is in use in Europe.
It is one of the major safe-haven currencies, thanks to the country’s historically healthy and well-run economy. In addition, there has almost always been zero inflation in Switzerland and the currency is backed 40% by gold reserves. It is used as a reserve currency around the world and is currently ranked fifth or sixth in value held as reserves after the US Dollar, the Euro, the Japanese Yen and UK Sterling.
The CHF has little purchasing power. Goods in Switzerland cost about twice as much as they would in the US. The small purchasing power arises due to the Swiss Franc being widely used as a reserve currency by entities throughout the world.
The currency’s ISO code, 'CHF', derives from the Latin name for Switzerland - Confoederatio Helvetica. This name is found on Swiss coins because it is 'language-neutral' with respect to the country’s four separate languages.
The sovereign debt crisis in Europe and the US propelled the Swiss Franc past US$1.30 as of August 2011, prompting the Swiss National Bank to boost the franc's liquidity in an attempt to counter its "massive overvaluation". Demand for francs and franc-denominated assets was so strong that nominal short-term Swiss interest rates actually became negative. The franc fell 8.8% against the euro, 9.5% against the dollar, and at least 8.2% against all 16 of the most active currencies on the day of the announcement. It was the largest plunge of the franc ever against the euro.

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Hungarian Forint Currency Exchange

Facts and figures about the Hungarian Forint

Quick history

The Hungarian Forint is the currency of Hungary and has the ISO code 'HUF'. The Forint was established on 1st August 1 1946 in the aftermath of the Second World War and the hyper-inflation that destroyed the previous currency, the Pengo – it was a crucial step in the stabilisation of the Hungarian economy, and the currency did indeed remain relatively stable until the 1980s.

The deterioration in competitiveness of the state-socialist economic system during the 1970s and 1980s, coupled with the transition to a market economy in the early 1990s, deteriorated the value of the Forint, and inflation peaked at 35% in 1991. Since 2001, however, inflation is in single digits and the Forint was declared fully convertible.

The Forint was formally sub-divided into 100 'filler' but these coins were rendered useless by inflation and have not been in circulation since 1996. A completely redesigned new series of 200, 500, 1000, 2000, 5000, 10000 and 20000 Forint banknotes was introduced gradually between 1997 and 2001. Each banknote depicts a famous Hungarian leader or politician on the obverse and a place or event related to him on the reverse.

All of the banknotes are watermarked, contain an embedded vertical security strip and are suitable for visually impaired people. The 1000 Forint and higher denominations are protected by an interwoven holographic security strip. The notes share the common size of 154 × 70 mm.

The banknotes are printed by the Hungarian Banknote Printing Corporation in Budapest.

Interesting facts

The Forint's name comes from the city of Florence, where golden coins were minted from 1252 called 'fiorino d'oro'.
Since 1995, Hungary has pegged the Forint against a basket of currencies (in which the US dollar represents 30%).
As a member of the European Union, the long-term aim of the Hungarian government is to replace the Forint with the euro.

For more information, get in touch with our currency specialists or open your free account today.

Arab Emirates Dirham Currency Exchange

Facts and figures about the Arab Emirates Dirham

Quick history

The Dirham – ISO code 'AED' – is the currency of the United Arab Emirates, which includes major principalities such as Abu Dhabi and Dubai. The Dirham has been in circulation since 19th May 1973, replacing the Qatar and Dubai Riyal and the Bahraini Dinar.

The currency was initially issued by the United Arab Emirates Currency Board but, since 1982, it has been issued by the United Arab Emirates Central Bank.

Since November 1997, the AED has been pegged to the US Dollar, at a rate of 1 US Dollar = 3.6725 Dirhams. As a result, the value of the AED rises and falls as the Dollar does. The peg was introduced because crude oil is the UAE’s dominant export, which is priced and sold in US Dollars. The peg also provides the benefits of macro-economic stability and relatively low inflation.

Banknotes are currently available in denominations of 5, 10, 20, 50, 100, 200, 500 and 1000 Dirham, and are issued by the UAE Currency Board. The obverse texts are written in Arabic with numbers in Eastern Arabic numerals; the reverse texts are in English with numbers in Arabic numerals.

The Dirham is sub-divided into 100 'fils' and its coins are denominated into 1, 5, 10, 25 and 50 fils, as well as the one dirham coin. The 1, 5 and 10 fils coins are struck in bronze, with the higher denominations struck in cupro-nickel. The 1, 5 and 10 fils coins are rarely used in everyday life, and so all amounts are rounded up or down to the nearest multiples of 25 fils. The 1 fils coin is a rarity and does not circulate significantly.

Interesting facts

The name Dirham derives from the Greek word Drachmae, literally meaning 'handful'.
By August 2006, it became publicly known that the Philippine one peso coin is the same size, shape and weight as one Dirham– as one peso is only worth eight fils, this has led to vending machine fraud in the UAE. The same is true of the Australian 10 cent coin, and has led to vending machine fraud.
A falcon watermark is present on all Dirham notes in order to prevent fraud.
The Central Bank has released a new 50 Dirham note. The security thread is a 3-mm wide, color-shifting windowed security thread with demetalized UAE 50, and it bears the new coat of arms which was adopted on 22 March 2008.

For more information, get in touch with our currency specialists or open your free account today.

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Glossary of terms

Helping you understand foreign currency, we have put together a glossary of foreign exchange terms

A
ABA/ Routing code	A digital code used by the American Bankers Association to define a bank. This may also be known as Fed wire.
Ask price	The price that currency is offered for sale.
B
Base Currency	Currencies are quoted as a foreign exchange pair, such as pound against dollar. The first currency quoted in the pair is the base currency.
Basis Point	One hundredth of one percentage point. A change from 5.25% to 5.75% is said to be a 50 basis point move. See 'Point' for currency moves.
Bear, Bearish, Bear Market	A Bear is a person who believes that the prices in the market will decline. This person would be considered Bearish. A Bear Market is a market that is declining (e.g. if the £ vs US$ rate is falling). If the decline was expected to continue, the market would be Bearish.
Beneficiary Country	The Country where you are sending the money.
Beneficiary Name	The person or company to whom you would like to make the payment.
Bid price	The price at which a client is willing to pay to buy a given currency.
BIC / SWIFT Code	This is the unique identification code of a particular bank consisting of 8 or 11 alphanumeric characters.
BSB Code	This is the local clearing code for Australian dollar payments and can be used in additions to the SWIFT code as extra reference when effecting payment from outside Australia. This will be 6 numerical characters in length.
Bull, Bullish, Bull Market	A Bull is a person who believes that prices in the market will rise. This person would be considered Bullish. A Bull Market is a market that is rising (e.g. if the £ vs US$ rate moves higher). If the advance is expected to continue, the market would be Bullish.
C
Cable	Foreign Exchange jargon for the UK Pound v US Dollar exchange rate. Alludes to the cable laid under the Atlantic, which linked the tickertape machines in New York and London. Central Bank - A Government institution in control of the nation's monetary policy and the printing of that nation's currency.
Consumer Price Index (CPI)	A measure of the average amount (price) paid for a market basket of goods and services by a typical U.S. consumer in comparison to the average paid for the same basket in an earlier base year.
D
Deficit Spending	A term which refers to the situation wherein he government spends more than it receives in taxes.
E
EMS	A term which refers to the situation wherein he government spends more than it receives in taxes.
Euro	The currency of the European Monetary Union (EMU). This is the amalgamation of the following currencies, after Jan. 1, 2002 these currencies will be considered legacy currencies. Germany Deutsche Marks, Italy Lira, Austria Schillings, France Franc, Belgium Francs, Netherlands (Dutch) Guilders, Finland Markka, Portugal Escudo, Greece Drachmas, Ireland Punt, Luxembourg Francs, Spanish Pesetas.
Exchange rate	The price that a currency can be bought or sold against another currency.
F
Federal Debt	The current dollar sum of obligations equal to the accumulated past deficits minus surpluses of the United States government.
Federal Open Market Committee (FOMC)	he body that is responsible for setting the interest rates and credit policies of the Federal Reserve System. A 12-member committee consisting of the seven members of the Federal Reserve Board and five of the twelve Federal Reserve Bank presidents. The Committee sets objectives for the growth of money and credit. These objectives are implemented through purchases and sales of U.S. government securities in the open market. The FOMC also establishes policy relating to System operations in the foreign exchange markets.
Federal Reserve	The central bank of the United States, with responsibility for implementing the country's monetary policy and regulating member banks of the System. The Fed was created in 1913 and is composed of 12 regional Federal Reserve Banks and a national Board of Governors.
Fiscal Policy	Government policy regarding taxation and spending. Fiscal policy is made by Congress and the Administration.
Foreign Exchange	The exchange of foreign currency. On the foreign exchange market, foreign currency is bought and sold for immediate (spot) or forward delivery.
Forward Contract	A forward contract fixes the exchange rate for future delivery at a date to be agreed by both participants. A deposit (or a minimum margin) is usually required in forward transactions. For example, if I want to lock in today's rate to buy $10,000 USD at 1.5820 Canadian for the next 4 months, I will have the ability to purchase up to $10,000 USD at this rate.
Fundamental Analysis	Focuses on the economic forces of supply and demand that causes price movement. The Fundamentalist studies the causes of market movement, whereas the Technician studies the effects.
FX	An abbreviation of Foreign Exchange.
H
Hedging	A hedging transaction is a purchase or sale of a financial product, having as its purpose the elimination of loss arising from price fluctuations. With regards to currency transactions it would protect one against fluctuations in the foreign exchange rate. (see Forward Contract)
I
IBAN	The International Bank Account Number (IBAN) is an international standard for identifying bank accounts across national borders.
Interbank Rates	The Foreign Exchange rates, at which large international banks quote other large international banks.
L
Limit Order	An order to buy or sell one currency against another when a pre-determined price is reached. It is lodged with a Bank or Broker and floats 24 hrs a day until either cancelled or hit. It is used to try and achieve a very favourable price at the very top or bottom of a range. It is free of charge to use and provides an excellent vehicle for companies to attempt to buy or sell their currencies at the best point in a range (without having to constantly monitor the prices and keep calling a broker/bank for prices).
M
Margin	A cash deposit provided by a client as collateral to cover a forward position.
Maturity	The date when a payment of an obligation or contract is due.
Monetary Policy	The federal government's attempt to change aggregate demand through money supply changes.
Money Markets	Refers to financial investments that are generally under one year in duration and generally only open to banks and other financial institutions.
O
Offer price	The pricing level at which a seller is prepared to sell a foreign currency.
Order	A client's instruction to buy or sell currency.
P
Point (or Pip)	The term used in currency market to represent the smallest incremental move an exchange rate can make. It is one one-hundredth of a percent. For example, when a currency moves from 1.5720 to 1.5725 it has moved 5 points.
R
Risk on	Describes a positive trading environment in which the market is confident enough to target traditionally riskier financial assets such as equities or higher-yielding currencies such as the AUD, NZD or CAD.
Risk off	Describes the environment is one in which market sentiment is weak and investors channel their funds into safe-haven assets such as US treasuries, the US Dollar and the Swiss Franc.
S
Settlement	(1) The final stage of a transaction, actual physical exchange of one currency for another (2) is the process by which available funds have been instructed by a client of Cambridge for transfer via wire, draft or deposit to a multi-currency account and a designated receiver of such funds.
Spot	A transaction which will come to settlement in two days. The spot market involves buying and selling currencies two days ahead.
Spot Rate	The current rate for a spot transaction.
Spread	The difference between the bid and offer prices. This is usually used for Interbank trade of currencies.
Stop-loss	An order that specifies that a trade should be closed at a specific rate.
Swift	Society of Worldwide Interbank Financial Telecommunications. It is a dedicated computer network that is set up to support fund transfer messages between member banks worldwide.
T
Trend	Simply the direction of the market, usually broken down to three categories….major, intermediate and short-term trends. Three directions are also associated with a trend; that is, uptrend, downtrend, and a sideways trend.
V
Value Date	The date that both parties of a transaction agree to exchange payments.
Volatility	A measure of price fluctuations. The standard deviation of a price series is commonly used to measure price volatility.
Volume	Represents the total amount of trading activity in a particular stock, commodity or index for that day. It is the total number of contracts traded during the day.
Y
Your Reference	This will allow the Recipient to easily identify your payment.

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Czech Koruna Currency Exchange

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Hong Kong dollars (HKD) Currency Exchange

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Danish Krone Currency Exchange

Facts and figures about the Danish Krone

Swiss Franc (CHF) Currency Exchange

Facts and figures about the Swiss Franc

Hungarian Forint Currency Exchange

Facts and figures about the Hungarian Forint

Arab Emirates Dirham Currency Exchange

Facts and figures about the Arab Emirates Dirham

Glossary of terms

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