Table of Contents
Introduction
Currency data is one of the most important markets in the world, with trillions of dollars changing hands every day. Currency exchanges are heavily regulated and have strict requirements for reporting accurate and timely exchange rates, but even so, mistakes happen. If you’re looking to make sure your currency data doesn’t contain any mistakes, here are five common mistakes that companies make when dealing with currency data:
You just assumed that the data was accurate
You just assumed that the data was accurate…
It’s important to know what kind of currency conversion you’re looking for. If it’s an up-to-date exchange rate, then you’ll likely be satisfied with a service like Google Currency Converter or Bloomberg’s FX Rates API. However, if you need historical data, or if your currency needs are more complex (for example, you need multiple exchange rates for different periods in different currencies), then this kind of general service won’t be right for your needs.
You used an API to source data, instead of pulling it directly from the source
As a data scientist, you know that APIs are not always reliable. Data can go down at any time or be delayed for days or even weeks. You also know that APIs can be expensive if you’re using them for hundreds of datasets and thousands of requests per day.
Sometimes it may seem like your only option is to use an API. But what if there were another way? What if your team could pull the data directly from the source instead?
You didn’t have a clear idea of what the data you needed looked like
To get the data you need and use it properly, you first need to have a clear idea of what the data looks like. What is the source? How was it collected? Answering these questions will help you figure out if your source is reliable and accurate. You should also know what purpose the data serves for you, who needs access to it, and how often they need it.
You didn’t have someone to explain your data needs in technical terms
If you don’t speak the language, you won’t get what you need. If you can’t explain how the data should be formatted and delivered, it’s going to be extremely difficult for any provider to get you what you want.
Make sure that your provider understands exactly what kind of data and how much of it, in terms of currency pairs (e.g., USD/JPY), rates (e.g., 1 USD = 100 JPY), and time frames (e.g., hourly, daily). Make sure that they understand whether or not your request includes only flat data or aggregated data as well as other factors like frequency (i.e., minutely, daily) and granularity (i.e., tick-by-tick).
You didn’t outsource the work to an expert
The best way to avoid these common currency data mistakes is to outsource the work to an expert. This can save you time and money, and make your investment in currency data pay off faster. Choosing a trusted provider will help ensure that your data meets all regulatory requirements and provides accurate, timely reports that are easy for you or your team members to understand.
A good provider should offer several services including:
- Accessing live rates (the cost of currency at any given moment) through multiple sources such as Bloomberg Terminals or Reuters Feeds
- Providing historical rate information going back more than one year (to help identify trends)
Additionally, look for providers who have access to proprietary feeds from banks and other financial institutions around the world—including exclusive contracts with government-owned central banks—so they can deliver real-time pricing on every major currency exchange around the globe.
