Indirect pricing method and direct quotation method.

1. Maybe many students are studying foreign exchange pricing, and when they first apply foreign exchange pricing, they always confuse indirect pricing method with direct quotation method. Not the ratio of two currencies, how to be indirect and direct, and then found the following definitions of "indirect pricing method" and "direct quotation method":

2. The direct quotation method, also known as the price payable method, is based on the foreign currency of a certain unit (1, 100, 1000, 10000) to calculate how much should be paid in domestic currency. Indirect pricing method, also known as accounts receivable pricing method. It is based on a unit's domestic currency (1, 100, 1000, 10000), which is converted into a certain amount of foreign currency direct quotation, that is, the price marking method, that is, the exchange rate expression method of other countries' currencies in domestic currency. Generally, the foreign currency of 1 unit or 100 unit is used to express how much domestic currency is converted. This method is also adopted in China, that is, it is denominated in USD/RMB. Direct quotation is easy to understand, that is, the more valuable the currency is, the less foreign currency is exchanged and the smaller the exchange rate is. On the contrary, the bigger. Except China, most countries also use this method to price exchange rates, such as USD/JPY.

Direct quotation.

Compared with the indirect pricing method of direct quotation, there is no difference in essence, but the pricing form is opposite, and the relationship between them is equivalent. Most of the above countries mainly adopt direct quotation method, and only a few developed countries adopt indirect pricing method. Like Britain. At present, in the foreign exchange market, in addition to Britain, there are euro/dollar, Australian dollar and US dollar.

Which way to take is related to a country's economic strength. Generally speaking, countries with relatively strong economic strength are ahead. Historically, because Britain and Great Britain were stronger, they used the price tag of GBP/USD. Even if it was later surpassed by the United States, this method was still used.