Also known as foreign exchange rate, or foreign exchange market, refers to the exchange rate between two currencies, and can also be regarded as the value of one country's currency against another country's currency. Specifically, it refers to the ratio or parity between one country's currency and another country's currency, or the price of another country's currency expressed in one country's currency.
The fluctuation of a country's foreign exchange market will have an impact on import and export trade, economic structure and production layout. Under certain conditions, by devaluing the local currency, that is, letting the exchange rate rise, it will promote exports and restrict imports; On the other hand, the appreciation of the domestic currency, that is, the decline of the exchange rate, plays a role in restricting exports and increasing imports.
Exchange rate pricing
1, direct quotation
The direct quotation method, also known as the price payable method, is to calculate how many units should be paid in the local currency based on a certain unit of foreign currency (1, 100, 10000,10000). It is equivalent to calculating how much local currency should be paid for purchasing a certain unit of foreign currency, so it is called the payable price method. In the international foreign exchange market, most countries in the world, including China, currently adopt direct quotation. For example, the exchange rate of Japanese yen against US dollar is 1 19.05, that is, 1 US dollar is 1 19.05 yen.
2. Indirect Price Method
Indirect pricing method is also called accounts receivable pricing method. It calculates the foreign exchange receivable currency of several units in the domestic currency of a unit (such as 1 unit). In the international foreign exchange market, euro, pound and Australian dollar are all indirectly priced. For example, the exchange rate of the euro against the US dollar is 0.9705, that is, 1 euro against 0.9705 US dollars. In indirect pricing method, the amount in local currency is constant, and the amount in foreign currency changes with the change of the value in local currency. If a certain amount of local currency can be converted into less foreign currency than the previous period, it means that the value of foreign currency rises and the value of local currency falls, that is, the foreign exchange rate rises; On the other hand, if a certain amount of local currency can be converted into more foreign currency than in the previous period, it means that the value of foreign currency declines and the value of local currency rises, that is, the foreign exchange rate declines, that is, the foreign exchange value is inversely proportional to the rise and fall of the exchange rate. Therefore, indirect pricing method is the opposite of direct quotation.
Direct quotation and indirect pricing have the same meaning to exchange rate fluctuation, that is, foreign currency depreciation, local currency appreciation, exchange rate decline, foreign currency appreciation, local currency depreciation and exchange rate rise. The difference lies in different pricing methods. Therefore, when quoting the exchange rate of a certain currency and explaining its exchange rate fluctuation, we must make clear which pricing method is adopted to avoid confusion.
3, the dollar price method
Dollar pricing method, also known as new york pricing method, refers to the indirect pricing method for other foreign currencies in new york international financial market, except for the direct quotation for pound sterling. The dollar pricing method was formulated and implemented by the United States in September of 1978 and 1, and it is a common pricing method in the international financial market (20 13 years).
Under the gold standard, the basis of exchange rate determination is MintPar, while under the condition of paper currency circulation, the basis of exchange rate determination is the actual value represented by paper currency.