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The following figure shows an example of currency conversion.
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The Currency Conversion report supports the conversion of returns to and from the Euro. The figures below show how this works.
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- The PACE_SYSTEM table 40 is accessed to determine if the FX rate is a multiplier or divisor. The default (0) is multiplier and (1) is a divisor.
- The internal field attribute 294 points to the FX_RATES column that is used for calculations. By default it will be spot rate column.
- The existing "Days to Look Back" feature is accessed.
- A second currency option dealing with EUR currency is accessed.
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Based on how foreign exchange markets are structured, you can, for example, convert from one currency to a second and then to a third currency. Triangulating back from the third to the first currency is arbitraged (that is, no profit or loss barring transaction cost).
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Based on this data, you can see that 1 USD is worth 119.14 Japanese Yen and 1 USD is worth 1.0504 Canadian dollars. Therefore 1 Canadian Dollar equals 119.14/1.0504 = 113.423 Japanese Yen.
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Eagle "Best Practice" recommends always storing from the Domestic currency (USD for USA clients) to a foreign currency. The following sample calculation assumes the data is stored that way. Assume the following Cross Currency system setup:
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Stored as Divisor
1USD = 0.666667 GBP
To convert 100 GBP to USD = 100/0. 666667 = 150USD
To convert 100 USD to GBP = 100 * (1/0. 666667) = 66.66667 GBP
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PACE system id 137 must be to set to 'Y' to enable the cross currency calculation. The default is 'N'. If set to 'N', PACE assumes that all cross currency rates are loaded in the FX_RATES table.
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- Cross currency process is ON using currency USD.
Consider the same profile with multiple base currencies: you can submit multiple funds with different base currencies in the same profile. The calculation first triangulates all combinations before processing individual funds. The code is optimized to make sure triangulation occurs only once per combination.
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Logs at Level 10 includes a section that simplifies debug triangulation issues. Log entries repeat for each Cross Currency calculation and effective date as shown.
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