If you’ve ever bought something on the internet, you’ve likely noticed that items are listed for one price for one currency but for a different price in another currency. It can seem like there isn’t a reason why a book might be more expensive in Canada than in the United States or less expensive in England than in Malta. What can be more confusing is that these prices change day to day, minute to minute, if it is being sold in a foreign currency different from your own. There is indeed a reason for this!
World exchange rates are based on investors' views of the relative strength or weakness of a country’s economy. This system is determined by the foreign exchange market, where buyers and sellers trade their Dollars, Euros, Pounds, Rupees, Yen, and Dinars (as well as many other currencies!) to try to make money. Foreign exchange rates are a set of ratios that you can often see on financial reports and television programs. We’re specifically going to discuss the exchange rates of countries you might go to in order to learn English:
The most widely traded currency in the world is the US dollar. Most currencies are priced at dollar exchange rates for this reason, and many goods from a barrel of oil to an mp3 player are priced in dollars too. You can normally change your home currency for US dollars at the airport or at some banks, and many newspapers list the daily foreign exchange rates. Alternatively, you can exchange your money into US dollars in your home country before you travel overseas to learn English. The symbol of the dollar is $; it’s abbreviated USD.
The British and many parts of the former British Empire use the pound sterling, or simply the pound for short. (The symbol is £, and the pound is abbreviated as GBP). Similar to the US dollar, you can change currencies before you arrive or when you are in Great Britain at many places like banks or airports. Once you’ve got your pounds, you can use them in England, Scotland, Wales, and Northern Ireland as well as many Crown dependencies like Jersey or Guernsey. There are often shops that specialize in buying and selling currency where your money can be changed. Be careful when changing money as you can be charged more than the listed foreign exchange rates for the day. The average value of the pound versus the US dollar for 2011 is .615, such that six pounds are roughly equal to ten dollars.
If you plan to travel to Canada to learn English, you will need the Canadian Dollar, which uses the same symbol as the US dollar: $. You can find the Canadian dollar, or “loonie” listed on world exchange rates as the CAD. The average exchange rate for the CAD versus the USD was .969 throughout 2011. This means that nine Canadian dollars will get you a little under ten US Dollars. Not bad, eh?
The Australians and New Zealanders use the Dollar too. Just like Canada and the US, the Australian and New Zealand dollar uses the $ symbol. The Australian dollar is one of the highest traded currencies in the world, after the Pound, the US dollar, the Euro, and the Yen. The Australian dollar is often symbolized as A$, and the New Zealand dollar is symbolized as NZ$ just to avoid confusion with the other dollars in the market. The average value of the Australian dollar, abbreviated AUD, versus the dollar for 2011 was .951, so that A$ 9.5 buys $10. This year on average the rate versus the US dollar was 1.25, so that you’d need twelve and a half NZ$ to buy ten American dollars.
The Maltese used to use the Maltese Lira, but recently switched over to the Euro to keep in line with the rest of Europe. The Euro is the second most traded currency in the world, after the US dollar. It is a hugely important part of the world financial system, and is kept on hand in almost as many places as American Dollars. The Euro can be used anywhere in the European Union area, should you decide to travel outside of Malta while you study English. The Euro has its own symbol, €. The value of the Euro versus the dollar for 2011 averaged out to be .702. This means you’d need seven Euro to equal ten American dollars.
The rates quoted here were averages for this year. It’s important when planning a visit to a foreign country that you check the exchange rate before you depart both for budgeting and to determine where to exchange your money. Even with that, however, you will want to check the exchange rate routinely as the exchange rates are constantly changing!