1. Is the exchange rate depreciation?
There are two pricing methods of exchange rate, namely indirect pricing and direct pricing.
Direct quotation is expressed by how much local currency the foreign currency is converted into, for example, 1 USD = RMB. For this exchange rate pricing method, the rise of the exchange rate means the depreciation of the local currency.
For example, the current quotation of USD against RMB is 1 USD against RMB. If the exchange rate rises to 0, it means that 1 USD can be converted into RMB. The conversion of foreign currency into local currency has increased, so the RMB has depreciated.
The indirect pricing method is expressed by how many foreign currencies the unit's local currency is converted into, for example, 1 RMB = USD. For indirect pricing method, the rise of exchange rate means the appreciation of local currency.
For example, the quotation of RMB against USD 1. If the exchange rate rises to that point, it means that 1 yuan RMB can be exchanged for US dollars, and the RMB will naturally appreciate.
Direct quotation is widely used in the world, so it can be assumed to be direct quotation without special explanation, that is, the rise of exchange rate means the depreciation of RMB.
Second, what is the impact of the exchange rate rise?
The rise of exchange rate and the depreciation of RMB have a certain relationship with the trend of A shares. Generally, A-shares will fall with the depreciation of RMB, because the depreciation of RMB will lead to a decline in the valuation of local currency assets and the outflow of hot money, which will have a certain impact on A-shares. In addition, the devaluation of the renminbi will shrink people's assets, especially those who hold real estate.
The above content about whether the exchange rate is up or down, I hope it will help everyone. Warm reminder, financial management is risky and investment needs to be cautious.