I just checked a couple of sites, and I think you
were looking at the interbank rate, or "prime
rate". This is the rate that banks give to each
other only - it's like the "prime interest rate"
for loans. Consumers are not offered this rate.

What is more typical for consumers to get is the
interbank rate + 4%, or "typical cash rate" - this
is the rate you can expect to get if you're
exchanging cash in person or at an airport.
Checking that right now, it's 1.145, and Paypal is
actually giving you a better rate than that.