If you’re sending money abroad, the U.S. dollar (USD) exchange rate can make a huge difference in how far your money goes.

The United States dollar is the most widely traded currency in the world and is used as the official currency for many more countries than just the U.S. In fact, some Latin American countries, such as El Salvador and Ecuador, use the U.S. dollar as their official currency. Other countries around the world that use the dollar as their official currency include Zimbabwe, Guam, and the Netherlands.

You can find a full list of countries that use the U.S. dollar here.

The U.S. dollar is also unofficially accepted as general currency in many countries around the globe. In fact, some countries such as the Philippines, Vietnam, and Honduras even support receiving USD via international money transfers because of how widely it’s used.

Despite how widely the dollar is used, it’s far from the only currency in use around the world. With most countries having their own currencies, it’s important to understand how the value of one country’s currency changes in relation to another, especially when sending money between countries. All of this also impacts the USD exchange rate.

What causes currency exchange rates to change?

There are many factors that can cause currency exchange rates to change, but we’ll explain why this happens using USD as the base currency. We will briefly cover how the value of the dollar impacts exchange rates between other countries, and how the economic health of both the U.S. and the other country play a role in the exchange rate.

At the very simplest level, the exchange rate between the U.S. dollar and another currency represents the price of one currency in units of the other currency.

For example, if 1.00 USD is worth 19.25 MXN (Mexican Peso), that is the price of U.S. dollars in terms of Mexican pesos. Alternatively, 1.00 MXN is worth 0.0519 USD, which represents the price of a Mexican peso in terms of U.S. dollars.

When you see changes in the exchange rate, it’s due to a change in supply and demand. For example, when there is economic turmoil in the U.S., and the rest of the world is concerned about the turmoil, this can result in a fall in demand for the U.S. dollar. When demand falls, the price falls, too.

Going back to the Mexican peso example, if 1.00 USD was worth 19.25 MXN, but then the price of the dollar falls, this can cause a decrease in the exchange rate to 1.00 USD now being worth 19.00 MXN (or 1.00 MXN = 0.0526 USD). Alternatively, if the U.S. economy is strengthening compared to another currency (Mexico, in our example), then the price of the U.S. dollar will increase as demand for that currency grows.

Although this is just a simple example using only USD and MXN, it’s important to know that the idea of supply and demand impacts the price of a currency and can be applied to any exchange rate.

How to find the best USD exchange rate

Banks, remittance, and other types of money transfer companies offer varying rates and fees when exchanging USD for another currency, or vice versa. It’s important to research what the official exchange rate is, then compare and look at the exchange rates offered by each company to find the best exchange rate per dollar.

However, it’s also important to find the best exchange rate with the least fees associated with the money transfer to help you send the most money possible to your loved ones. Sometimes a service offering a better rate for today’s dollar is also charging a higher fee, meaning your recipient is getting less overall cash.

Click on the links below to see today’s dollar rates with Remitly when sending to some of our available Latin American countries, along with the associated money transfer fees:

You’ll soon see why Remitly was named one of the best ways to send money. When you take advantage of our rates and low-to-no transfer fees, more money makes it home for each dollar you send.

Remitly also has cash pickup locations and bank partners across the world. You can make direct deposits into any major bank and most rural banks in your recipients’ country, or you can choose the closest location for them to pick up the cash so your money can get to your loved ones in the most convenient way possible.

Okay, Remitly offers a great USD exchange rate. How do I send money?

Sending money with Remitly is easy! The following video will tell you everything you need to know about how to get started and send your first transfer:

If I send in U.S. Dollars, what currency will my recipient receive?

It depends on where you are sending money. In some countries like Mexico and Colombia, you can choose to send money in that country’s local currency. For countries like Bolivia, you can send in either Bolivian boliviano (BOB) or USD. And in countries like El Salvador, you can only send in USD.

To learn more about what currency your recipient can receive, visit the pricing page, like the ones linked to above, of the country you wish to send money to.

And if this is the first time you send money with Remitly, you’ll get a special promotional rate for new customers. Sign up now!