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In this video tutorial, the process of converting currency using the exchange rate is demonstrated through a problem involving John, who wants to convert 15,000 US dollars into Euros. The given exchange rate is that 1 US dollar equals 0.9 Euros. To find out how many Euros John will receive, the tutorial explains how to set up a fraction with the dollar amount in the numerator and the exchange rate in a way that allows for the cancellation of units. Specifically, US dollars must be in the denominator of the exchange fraction so that the currencies can effectively cancel, leaving Euros as the result. The video illustrates this step-by-step approach to achieve the correct conversion.