# Converting Currencies

 Reference:

Euro currency was introduced in Euroland on January 1, 2002, and on July 1, 2002 it became the only legal tender. All monetary transactions now occur in euro currency.

The European Union has set fixed exchange rates between the euro and the traditional national currency in each of the 12 adopting member nations. Although 12 or more currencies in the European Union use the euro, more than 100 currencies have a recognized status worldwide. In addition, you may need to define custom currencies for other applications.

While the exchange rates within Euroland remain fixed, exchange rates between the euro and non-euro countries continue to vary freely and, in fact, several rates may be in use at one time (for example, actual and budgeted rates).

You identify your currency codes and rates by creating a currency data source. For more information, see Creating the Currency Data Source.

## Reference: Currency Conversion Rules

The European Union has established the following rules for currency conversions:

• The exchange rate must be specified as a decimal value, r, with six significant digits.

This rate will establish the following relationship between the euro and the particular national currency:

1 euro = r national units

• To convert from the euro to the national unit, multiply by r and round the result to two decimal places.
• To convert from the national currency to the euro, divide by r and round the result to two decimal places.
• To convert from one national currency to another, first convert from one national unit to the euro, rounding the result to three decimal places (your application rounds to exactly three decimal places). Then convert from the euro to the second national unit, rounding the result to two decimal places. This two-step conversion process is triangulation.

### Example: Performing Triangulation

The following example illustrates triangulation. In this case, 10 US dollars (USD) are converted to French francs (FRF). The exchange rate for USD to euros (EUR) is 1.17249. The exchange rate for FRF to euros is 6.55957.

• The 10 USD are converted to EUR by dividing the 10 USD by the EUR exchange rate of 0.8840:
`EUR = 10 / 0.8840`

This results in 11.3122 euros.

• The euros are converted to FRF by multiplying the above result by the exchange rate of FRF for euros (6.55957):
`FRF = 11.3122 * 6.55957`

The result is 74.26. FRF. This means 74.26 FRF are equivalent to 10 USD.

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