Like all other conversion factors, the conversion factors between currencies (i.e., the exchange rates) are treated as constants in GoldSim. Unlike other conversion factors, however, in the real world, exchange rates vary with time.
In many cases, it will be most appropriate for you to assume a constant exchange rate in you simulation models. In some cases, however, the time variable nature of exchange rates may be a critical part of your model, and must be included explicitly.
In order to represent variable exchange rates, you must model the exchange rate directly in your model as a variable. This can be done as follows:
1. Create a model for the exchange rate. The exchange rate will typically be the output of a Time Series element or a History Generator element. The exchange rate is dimensionless (e.g., it will have units of EUR/$).
2. In the Currencies dialog, define the conversion factor as 1.
3. In your model, compute you answers in one currency (e.g., $) and then manually convert them to the other currency (e.g., EUR) by multiplying them by the output representing the exchange rate.
A simple example illustrating this procedure (VariableExchange.gsm) can be found in the can be found in the Financial Examples folder in your GoldSim directory (accessed by selecting File | Open Example... from the main menu).
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Example: Simulating Variable Exchange Rates