---
title: "Is a higher exchange rate better? It depends which side you're on"
description: "A guide to whether a higher exchange rate is better: how to read a quote, who wins when it rises, and what a move from 1.10 to 1.25 does to 100 dollars."
author: "Wealtie Team"
published: 2026-11-09
updated: 2026-11-09
category: "Multi-currency & travel"
canonical: https://wealtie.com/blog/is-a-higher-exchange-rate-better
---

# Is a higher exchange rate better? It depends which side you're on

Is a higher exchange rate better? For whoever holds the first currency in the quote, yes: if the euro goes from 1.10 to 1.25 dollars, each euro buys more, which helps euro earners and hurts dollar earners.

## Key takeaways

- A higher rate means one unit of the first currency buys more of the second, so it's good news for whoever holds the first one.
- If the euro rises from 1.10 to 1.25 dollars, a 100-dollar purchase falls from 90.91 euros to 80 euros for someone paying in euros.
- The same rise cuts a 1,000-dollar freelance payment from 909.09 euros to 800 euros.
- Check which way round a rate is written, since the same exchange can be quoted either way.

## How do you read an exchange rate?

The rate tells you how much of the second currency one unit of the first buys. On 9 November 2026 the [ECB's euro reference rate](https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html) was 1.1193 for the dollar, meaning one euro bought 1.1193 dollars.

The trap is that the same exchange can be written both ways. 1.1193 dollars per euro is the same as about 0.89 euros per dollar. Before you decide whether a rate's good, check which currency is "one".

## Is a higher exchange rate better?

Better for the holder of the first currency, worse for the holder of the second. Here's what happens to 100 dollars when the euro strengthens, in illustrative rates:

| Dollars per euro | 100 dollars costs, in euros | 1,000 dollars is worth, in euros |
| --- | --- | --- |
| 1.00 | 100.00 | 1,000.00 |
| 1.10 | 90.91 | 909.09 |
| 1.25 | 80.00 | 800.00 |

![What 1,000 dollars is worth in euros. 1.00: 1000, 1.10: 909.09, 1.25: 800.](https://us-1-s3.polodev.net/wealtie-blog-media/posts/2026/11/what-1-000-dollars-is-worth-in-euros-1-00-1000-1-10-909-09-745a9e8289.webp "Source: Worked example; ECB euro reference rates for how rates are quoted")

Read across the second column if you're paying for something in dollars and earning in euros. A higher rate means your hotel in New York got cheaper. Read across the third column if you're earning dollars and spending euros. A higher rate means your invoice is worth less.

## Who wins and who loses when a rate rises?

It comes down to which currency you earn in and which one you spend in. For the euro-dollar rate going up:

| You | Result |
| --- | --- |
| Earn euros, travel to the US | Trip gets cheaper |
| Earn euros, buy from US websites | Purchases get cheaper |
| Freelance in euros for US clients | Invoices are worth less |
| Earn dollars, living in Europe | Rent and groceries cost more |
| Hold savings in dollars, spend euros | Savings are worth less in euros |

The same table flips when the rate falls.

## Is a lower exchange rate better?

For the holder of the second currency, yes. If you earn dollars and spend euros, you'd want a lower euro-dollar rate, because each dollar goes further.

Whether it's good for a whole country is a separate question, with winners on each side. Exporters tend to like a weak home currency, and people who import or travel tend to like a strong one. For your own budget, the only question is which side of the quote your money is on.

## How much does a move in the rate matter to a budget?

Work it out on your own numbers. If you earn euros and spend 1,500 dollars a month, the rise from 1.10 to 1.25 takes that cost from 1,363.64 euros to 1,200 euros, which is 163.64 less each month.

If you freelance in euros and invoice 3,000 dollars a month, the same move takes your income from 2,727.27 euros to 2,400 euros. That's 327.27 less, and your rent hasn't changed.

If your income's in one currency and your costs are in another, budget at a slightly worse rate than today's. A monthly plan that only works at the current rate will come up short the first time it moves against you, and [how to plan for exchange swings](https://wealtie.com/blog/budgeting-as-an-expat) has a way to set that margin.

## Why isn't the rate you get the same as the one in the news?

Because the published rate is a reference, and whoever converts your money adds a charge. A card, a bank or an exchange counter will quote something a bit worse than the rate you've seen online, and the gap is what they earn. [Foreign transaction fees](https://wealtie.com/blog/foreign-transaction-fees) covers what cards charge on top.

So a "good" rate on the news doesn't tell you what you'll receive. Compare the amount you'd end up with, after fees, from each option.

## Should you wait for a better rate?

Usually not, if you need the money on a date. Nobody can reliably say where a rate's heading in the next few weeks. Changing plans on a guess can cost more than the rate would save.

If you're paying for something large and you've got time, converting it in stages spreads the risk. Half now and half later averages out the rate you get. For a regular income in another currency, keep the amount in that currency until you need it, then convert what you need. [Tracking spending in two currencies](https://wealtie.com/blog/track-spending-two-currencies) shows why your total moves when the rate does.

## How do you see this in your own numbers in Wealtie?

Each account in Wealtie keeps its own currency, and your total's converted into a display currency at each day's rate. If you've got a dollar account and a euro display currency, your [net worth tracker](https://wealtie.com/features/accounts) total will move when the rate moves, even on days you've spent nothing. The [multi-currency budget app](https://wealtie.com/features/currencies) supports 68 currencies, all on the Free plan.

## Questions people ask

### Is a higher exchange rate good or bad?

Good for whoever holds the first currency in the quote, and bad for whoever holds the second. If one euro buys more dollars, euro earners gain and dollar earners lose.

### Is a lower exchange rate better for travellers?

Yes, if the rate shows how much of your home currency one unit of the foreign currency costs. A lower figure then means the trip is cheaper, so check which way round it's written.

### How do I know which currency is stronger?

Look at how the rate moves over time. A single rate can't tell you, since 1 euro buying 1.1 dollars or 170 yen says nothing about strength, but a rise over time shows the first currency has gained.

### Does a strong currency mean a strong economy?

Not by itself. A currency can rise for many reasons, including interest rates, and a weaker one can help a country's exporters.

## Sources

1. [Euro foreign exchange reference rates](https://www.ecb.europa.eu/stats/policy_and_exchange_rates/euro_reference_exchange_rates/html/index.en.html) (European Central Bank, checked 9 November 2026)

*This article is general information, not financial, tax or legal advice. Your situation is your own; check the numbers that apply to you before you act on them.*