Currency triangulation

Currency triangulation is the process of converting one currency to another by way of a third currency.

This scenario is a setup option to reduce the number of direct relationships.

How is triangulation used?

For any business that uses multiple transaction currencies, there may be a maintenance advantage to using triangulation. For example, maintaining the exchange rates between 10 currencies will involve 90 rates. If the business model supports triangulation through a chosen intermediate currency, then only 20 rates must be maintained. Currency relationships must exist between all possible currency combinations, regardless of the use of triangulation.

Triangulation within the Currency solution is defined at the currency relationship level. Thereafter, any reference to that relationship will cause the triangulation method of conversion to be invoked. This can occur during conversions between transaction currency and functional currency, alternate currencies, or enterprise currencies.

Triangulation setup requirements

To use triangulation, you must set up three relationships:

From the source currency to the target currency, triangulated by using the intermediate currency with no daily rate.
From the source currency to the intermediary currency with a set daily rate, and, if applicable, a set period rate.
From the intermediary currency to the target currency with a set daily rate and, if applicable, a set period rate.