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.
The European Union has established the following rules for currency conversions:
This rate will establish the following relationship between the euro and the particular national currency:
1 euro = r national units
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.
EUR = 10 / 0.8840
This results in 11.3122 euros.
FRF = 11.3122 * 6.55957
The result is 74.26. FRF. This means 74.26 FRF are equivalent to 10 USD.