Foreign currency exchange rate refers to the exchange rate between foreign currency and local currency in the international foreign exchange market.

For example, L USD = 1 10 yen, which means that the exchange rate between USD and JPY is 1 10, and USD10 can be converted into JPY 65438 or JPY 10. In international economic exchanges, it is often necessary to exchange money. For example, if a Japanese importer wants to import US equipment worth US$ 6,543,800, he must first convert 654.38+ 065.438+000 yen into US$ 6,543,800, and then pay the price. At present, in the international foreign exchange currency market, many foreign exchange transactions are divorced from this kind of economic transactions. For example, someone buys this currency and sells it at a high price after the exchange rate rises, thus making a lot of profits. Therefore, foreign exchange has become a profitable investment tool.

At present, there are two foreign currency exchange rate pricing methods in the world: direct quotation and indirect pricing.

Simply put, direct quotation is a method to measure the exchange rate by expressing a certain unit of foreign currency with a certain amount of local currency, or converting a certain amount of payable local currency with a certain unit of foreign currency as the standard.

For example, with Japanese yen as the local currency, under the direct price label:

1 USD = 1 10 yen

1 = 165.80 yen

1 mark = 64.94 yen

In foreign exchange transactions, the amount of foreign currency expressed by direct quotation is fixed, and the fluctuation of exchange rate is expressed by the change of the amount of local currency. If the amount of foreign currency converted into local currency increases, it means that foreign currency appreciates and local currency depreciates; On the contrary, if the amount of foreign currency converted into local currency decreases, it means that foreign currency depreciates relative to local currency, while local currency appreciates. Simply put, under direct quotation, the greater the exchange rate, the greater the value of foreign currency, and vice versa.

At present, all countries except Britain, America and Australia use direct quotation. This method is also used in the foreign exchange quotation of RMB in China.

Indirect pricing method is a method to measure the exchange rate by expressing the local currency of a unit with a certain amount of foreign currency or calculating the foreign currency of a unit with the local currency of a unit as the standard.

For example: l USD = 1.6840 mark.

1 USD = 1 10 yen

1 = 165 yen

1 AUD = 1.6820 USD.

In foreign exchange transactions, the value of local currency expressed by indirect pricing method is fixed, and the fluctuation of exchange rate is expressed by the change of foreign currency amount. The higher the value, the smaller the value of foreign currency relative to local currency (depreciation); The smaller the value, the higher the value of foreign currency relative to local currency (appreciation). At present, only Britain, the United States and Australia adopt the indirect pricing method. Before September 1978, the United States also made a direct offer. Later, in order to be consistent with the dollar price in the international market, it was changed to the indirect price method.

The relationship between foreign exchange rate and domestic exchange rate: the foreign exchange rate is high; Low external rate, low external rate.