1, direct quotation (refer to "payable pricing method"), also known as price pricing method, refers to how many units of foreign currency are calculated for conversion based on a certain unit (1, 100, 1000, etc.). ). It is equivalent to calculating how much local currency should be paid for purchasing a unit of foreign currency, so it is called the payable price method. Most countries in the world, including China, adopt direct quotation. In the international foreign exchange market, Japanese yen, Swiss franc and Canadian dollar are all quoted directly, such as Japanese yen 1 19.05, that is, one dollar against 1 19.05 yen. Under the direct quotation, if a unit's foreign currency conversion cost currency is more than the previous period, it means that the foreign currency value rises or the local currency value falls, which is called the foreign exchange rate rise; On the other hand, if you want to use less local currency than before, you can convert it into the same amount of foreign currency, that is to say, the decline of foreign currency value or the increase of local currency value is called the decline of foreign exchange rate, that is, the value of foreign currency is directly proportional to the rise and fall of exchange rate.
2. Indirect quotation method (refer to "quotation receivable method") Indirect quotation method is also called quotation receivable method. It is based on a certain unit of the country's currency (such as 1 unit) to calculate several units of foreign currency receivable. In the international foreign exchange market, euro, pound and Australian dollar are all indirectly priced. For example, the euro is 0.9705, which means that 1 euro is 0.9705 USD.
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 falls; 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 rises, 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. The quotation in the foreign exchange market is generally a two-way quotation, that is, the quotation party quotes its own buying price and selling price at the same time, and the customer decides the buying and selling direction by himself. The smaller the difference between the buying price and the selling price, the smaller the cost for investors. The quotation spread of inter-bank transactions is normally 2-3 points, and the quotation spread of banks (or dealers) to customers varies greatly according to various situations. The quotation spread of foreign margin trading is basically 3-5 points, 6-8 points in Hong Kong and 10-40 points in domestic banks. Under the gold standard system, the basis of exchange rate determination is the golden point, while under the condition of paper money circulation, the basis of exchange rate determination is purchasing power parity.
3. Direct quotation and indirect quotation.
The meanings of direct quotation and indirect pricing are completely opposite to exchange rate fluctuation, so when quoting the exchange rate of a certain currency and explaining its exchange rate fluctuation, it is necessary to specify which pricing method to adopt to avoid confusion.
4. Dollar price method is also called new york 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.
It must be pointed out that with the development of globalization of foreign exchange transactions, the traditional direct quotation and indirect pricing methods adopted by various countries have been unable to meet the needs of international foreign exchange development and need a unified exchange rate expression. As a result, pricing methods based on major international currencies or key currencies have emerged. The foreign exchange quotations published in foreign exchange markets in various countries are all based on US dollars. The exchange rate between two currencies other than the US dollar must be calculated by the exchange rate between their respective currencies and the US dollar. This pricing method is called "dollar pricing method".