The concept of foreign exchange can be divided into static and dynamic.
1, static concept
The static concept of foreign exchange refers to the means of payment expressed in foreign currency that can be used for international settlement. This means of payment includes credit instruments and securities expressed in foreign currency, such as bank deposits, commercial bills, bank drafts, bank checks, long-term and short-term government securities, etc.
2. Dynamic concept
The dynamic concept of foreign exchange refers to a specialized business activity that one country's currency pair is converted into another country's currency to pay off international creditor's rights and debts. It is short for international exchange.
What needs to be pointed out here is that the currencies of some countries are not freely convertible in the international market, so they can only be counted as foreign currencies, not as foreign exchange.
Exchange rate pricing method
I. Direct quotation
Direct quotation is a way to express a unit's foreign currency exchange rate in domestic currency. Generally speaking, foreign currency of 1 unit or 100 unit can be converted into local currency. At present, most countries in the world adopt direct quotation, and China also adopts direct quotation. For example, the dollar against RMB is 1:6.4906.
Second, the indirect price method
Indirect pricing method is a method of expressing the exchange rate of a certain unit of domestic currency in foreign currency. Generally speaking, how many foreign currencies can be exchanged for the local currency of 1 unit or 100 unit? At present, only a few countries in the world adopt indirect pricing methods, such as pound, euro, Australian dollar, New Zealand dollar and Irish pound. For example, for Britain, the exchange rate of British pound against RMB is 1: 9.445438+0, which is the indirect pricing method.
What are the main products and symbols?
According to international practice, three English letters are usually used to indicate the name or code of currency.
Dollar: USD
Pound: Pound
Euro: Euro
Japanese yen: Japanese yen
Canadian dollar: Canadian dollar
Swiss franc: Swiss franc
Australian dollar: Australian dollar
New Zealand dollar: New Zealand dollar