How do exchange rates impact international AWS bills?
AWS Cost Management is a complex process for any company. But for businesses operating outside of the United States, there’s additional complexity to consider: foreign transaction fees. Cross-currency transactions can accrue significant unwanted fees on many credit cards, and Amazon Web Services, an American company, prices in USD and bills in USD by default.
Understanding the degree to which AWS can accommodate different currencies, and knowing how to account for the limitations of those accommodations and the potential challenges that operating across multiple currencies can introduce, is key to staying within your budget and remaining cost-effective with your AWS use.
AWS’s currency accommodations
Amazon allows you to set a payment currency preference for your AWS account in order to be billed in your local currency and avoid cross-currency transaction fees. You can choose from 12 different currencies including AUD, EUR, and USD on the Account Settings section of the Billing Console.
However, setting a currency preference can introduce several other nuances to your cost management that you should keep in mind.
It’s important to note that your payment currency preference setting does not serve as a universal filter for your AWS console, and that if you choose a preferred currency other than USD, AWS services will continue to be priced in USD. Only your estimated bill and invoice total will be converted into your selected currency, so be sure not to confuse which type of currency you’re looking at.
Accounting for fluctuating exchange rates
The fact that exchange rates are always in flux means that, unfortunately, you’ll never be able to perfectly predict how much your usage will end up costing you.
The Billing Console will display the current exchange rate between your preferred currency and USD on any given day. However, your invoice total will be calculated according to the exchange rate at the time your invoice is created. Sometimes, this might work in your favor—and sometimes not.
For example, say you spend $6,000 USD in Reserved Instance purchases on the fifth of the month, which is the equivalent of $7,800 AUD per the exchange rate on that day. However, by the time your bill is calculated on the 30th, exchange rates have fluctuated such that you’re charged $8,000 AUD.
You can account for this uncertainty by giving yourself some wiggle room in your budgeting. If your total budget for Reserved Instance purchases in the above example was $7,800, you probably shouldn’t have spent all of it—the fact that you didn’t leave room for exchange rate changes ultimately landed you over-budget. Instead, perhaps hold off on some of the lower-priority Reserved Instances until your next purchasing round.
In spite of the fact that you can’t be entirely sure of your bill until it arrives, you should of course still keep close tabs on the current exchange rate between your local currency and US currency in order to understand roughly how much you’re spending as you spend it. Google has a good currency converter that you can reference, in addition to the resources provided in the AWS console for estimating your total.
Understand the impact
In addition to accounting for fluctuating exchange rates in your monthly budgeting, you should take these fluctuations into consideration when interpreting your spending trends over time. Have you actually increased your AWS usage this month, or is your increased bill simply a reflection of exchange rate changes?
One easy way to tell is with an EC2 Usage Analytics report. You can see exactly how your usage is trending and compare your usage to past time periods using a Time Period Comparison:
If you find that your usage has remained consistent in spite of changing costs, check to see how exchange rates have changed—it could be that a fluctuation is to blame.
Whether you’re based in San Francisco or in Sydney, Cloudability can help you identify exactly where your AWS costs are coming from to ensure intelligent, deliberate spending across your organization. Log in or sign up for a free 14-day trial of Cloudability Pro today.