How currency switching works and how the system picks the live currency rates

I want to understand the process on how the currency conversion works in the compensation modules. I have gone through few of the tasks under the setup and maintenance on 'Manage currencies', 'manage currency rates.' I would like to understand if we are importing the live currency rates into the system . And what are the steps involved in the process. How the system picks up the live currencies while enabling the 'Manage currency switching task'