This is considered self employment income and should be shown in the self employment section of a tax return, as it will be subject to UK class 2 and class 4 NIC, where the thresholds are exceeded.
Only if you have paid any foreign tax on this income and want to claim foreign tax credit relief against it, do you need to declare it in the foreign section (SA106) and claim a foreign tax credit relief.
The royalties should be converted to UK pounds sterling, added to the sterling figure for royalties and reported in the self employment section of the tax return.
If the royalties from the ebooks are a different trade to your free lance work, a separate self employment section should be used, so that you are showing 2 self employments.
Official exchange rates can be found at (Exchange rates from HMRC in CSV and XML format
You are free to choose any one of the three methods of exchange, so it makes sense to use the method that is most beneficial to you.