Currency exchange is the conversion of one currency into another currency. It is an important aspect of international finance and trading, as money has to be converted to facilitate transactions in international markets. Currency exchanges are offered by banks, brokers, casinos, pawn shops, post offices and other financial institutions. Currency exchange services allow customers to buy and sell different currencies at a rate dictated by the market.

The foreign exchange market, often referred to as the FX or Forex market, is a global decentralized market for the trading of currencies. This market is the largest financial market in the world, with trades exceeding 5.1 trillion US dollars daily. Currencies are traded in pairs, such as the US dollar and the Japanese yen, or the British Pound and the Swiss Franc. The prices at which currencies are exchanged, referred to as exchange rates, are determined by factors like government policies, political stability, economics, or supply and demand.

In order to facilitate currency exchange, institutions use adjusted exchange rates. These are adjusted slightly to allow for a margin of profit for the institution making the exchange. Exchange rates may differ depending on the type of service being offered and by which institution. Currency exchanges may also take into consideration the demand for a given currency, the volume of purchase, and the amount being exchanged. This includes not only banks and other financial institutions but also dealers, traders and brokers. It is always important to compare exchange rates when converting currency, as the rates can vary significantly.

In addition to physical locations offering currency exchange services, customers can now take advantage of online exchanges. Online exchanges provide a convenient way to compare exchange rates and can usually offer competitive rates. By doing so, customers can save money on the cost of their exchange.

For consumers looking to purchase a new currency, for whatever reason, the main benefit of currency exchange is the ability to obtain a competitive rate. It is always important to compare exchange rates prior to a conversion, as rates may vary considerably from one institution to the next. Currency exchange services can be useful for personal transactions as well as for businesses to facilitate trade in multiple currencies.