Posted by forex at 7:27 AM
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1. Understand how currency is quoted. Currencies are quoted in pairs. The currency that is used as a reference is the quote currency, while the currency that is quoted in relation to the quote currency is the transaction currency. In the pairing GBP (pounds)/USD (dollars), the quote currency is GBP and the transaction currency is USD.
2. Understand how currency changes in value. The quotation GBP/USD 1.8500 means that one pound is exchanged for 1.8500 U.S. dollars. If the quote changes from GBP/USD 1.8500 to 1.8510, the pound has increased in value. But if the GBP/USD quote changes from 1.8500 to 1.8490, the pound is relatively weaker than the dollar.
3. Determine the exchange rate for the pound against the dollar. You can get a quote from any major financial institution. One of the most popular forex websites is OandA (see Resources). Use the drop-down menu to select GBP in the 'Currency I Have' box and USD in the 'Currency I Want' box.
4. Multiply the exchange rate by the amount of pounds. For instance, if you see a listing for 100 pounds, multiply 100 by the current GBP/USD exchange rate for the value of the listing in dollars.