When you fund with a local currency, you aren't trading with that currency - you would be trading with your denominated trading account currency - which means exchange rates need to take place in order for funds to be deposited.
Your deposits are converted by the PSPs from the local currency to the client account currency. The exchange rates are set to Spot +2% or greater for most PSPs. Global Prime absorbs everything greater than 2%.
But what does this mean for the client?
If you deposit via a PSP using a local currency you'll be shown the rate that you are getting. You'll still get the exact amount you are wanting to deposit, you'll just have to account for the Foreign Exchange Conversion Fees for that transaction to take place, along with any other foreign processing fees that your bank may be charging you.
1000 x 2% (0.02) = $20
It can also be understood as Spot Rate + 2%
Your bank account would require $1020 to perform this transaction.