Traditionally, currency exchange services were mainly limited to banks. In addition to that, there were some Bureau de Change offices or counters where you could buy or sell foreign currency in the UK. However, just like other financial operations, from online banking to real-time cross-border transactions, currency exchange has also evolved for the better. Today, countless bureaux, FX services, and online platforms offer better rates and transparent fees, making it easier than ever to buy or sell foreign currency in the UK, pushing traditional banks to the sidelines.

Whether you choose to make an exchange via an online platform, any bureau or bank, whenever you go for an exchange, it isn’t about a quick swap of currencies and you are done. The first thing you’ll come across is a list with ‘buy’ and ‘sell’ rates displayed on the website, counter, or board. For someone who isn’t familiar with foreign currency exchange, it may be confusing and complicated to comprehend how much money they will receive. With scams around every corner, not knowing the correct rate leaves you vulnerable to being shortchanged. So if you don’t know how to read currency exchange rates or the list seems confusing, here’s a detailed guide to help you decode the rate list, so on your next exchange, you don’t have to rely on guesswork!

How to Read the Exchange Rate List?

Currency Pairs:

Exchange rates are always listed as a currency pair, but it can be confusing to know which currency the rate refers to. Essentially, the first currency in the pair is the base currency, and the second is the quote currency.

Base Currency: For which the rate of 1 unit is given.
Quote Currency: It tells how many units of this currency are required to buy 1 unit of the base currency.

For example: GBP/USD = 1.30

In this example, the Base Currency is the British Pound, and the Quote Currency is US Dollars, which means that 1 British Pound is equivalent to 1.30 US Dollars.

Buy Vs Sell Rate

Every currency exchange rate list typically shows two columns: buy rate and sell rate, with the corresponding rates listed below each. But what does that mean? Let’s break it down:

Buy Rate: Also known as the ‘bid price’. It is the rate at which the provider buys the foreign currency from you. For example, if the buy rate for the euro is 1.12, then for every euro you sell, you’ll get 1.12 pounds for it.
Sell Rate: Also known as the ‘ask price’, the rate at which the provider will sell that currency to you. So, if the exchange rate for the euro is 1.15 pounds, that means for every euro you buy, you’ll pay 1.15 pounds.

In the simplest words, this is what we mean by buy or sell rates in the currency exchange. However, it is crucial to note that buy and sell rates are not the same, and the buy rate is always lower than the sell rate due to the profit margin. Just like in the above example, the difference of 0.03 euros per pound was the profit margin of that provider.

Direct vs Indirect Quote:

Direct Quote: The direct quote indicates the number of units of the local currency needed to purchase one unit of the foreign currency.

(Domestic Currency / Foreign Currency)

For example: GBP/USD

Indirect Quote: On the contrary, an indirect quote shows how much foreign currency you get for 1 unit of your local currency.

(Foreign currency/ Domestic Currency)

For example: USD/GBP

However, when you go to buy or sell foreign currency in the UK, you’ll mostly come across direct quotes at banks, bureaus, or platforms.

This guide can help you better understand the rate, identify any hidden charges, and calculate the amount of currency you’ll receive in exchange for each unit. And if you want to learn how to calculate currency exchange rate, check out our blog

Buy or Sell Foreign Currency in the UK with Linea Global!

Your reliable currency exchange service provider, which offers a range of trading options from spot to market orders, where every personal and business transaction is made with utmost transparency and security. Whether you want real-time market updates, customised rate alerts or risk management strategies to safeguard your profit in every exchange, we’ve got you covered.