Exchange rate calculation: to convert the currencies of two countries, we must first determine which country's currency is the standard. Due to different standards, there are two quotation methods for foreign exchange rates. Direct quotation is based on the foreign currency of 1 unit or 100 unit and converted into a certain amount of local currency. Under direct quotation, the amount of foreign currency is fixed, while the amount of local currency changes with the change of the value of foreign currency or local currency. Most countries use direct quotation. In some countries, the value of monetary units is relatively low, such as Japanese yen and Italian lira. At present,100,000 or10,000 is sometimes used as the conversion standard. The indirect quotation is based on the domestic currency of 1 unit or 100 unit and converted into a certain amount of foreign currency. Under the indirect pricing method, the local currency amount is fixed, while the foreign currency amount changes with the change of the local currency or foreign currency value. Both Britain and the United States adopt indirect pricing method > Factors affecting exchange rate changes > The real value represented by the two currencies is the basis of exchange rate determination, and the exchange rate is constantly changing under the influence of the following main factors. (1) balance of payments: foreign trade balance plays a decisive role in exchange rate changes. Foreign trade surplus, the local currency exchange rate will rise; On the contrary, it will fall. The balance of foreign trade directly affects foreign exchange supply and demand. (2) Inflation: It is not only directly related to the actual value and purchasing power of the currency itself, but also related to the external competitiveness of commodities and the psychological impact on the foreign exchange market. When inflation slows down, the local currency exchange rate will rise; On the contrary, it will fall. (3) The influence of interest rate level on capital flow: Under certain conditions, high interest rate level can attract international short-term capital inflows and raise the exchange rate of local currency; Low interest rates are the opposite. The US dollar strengthened in the first half of 1980s, which was the result of the high interest rate policy in the United States. (4) Exchange rate policies of various countries: Although exchange rate policies cannot change the basic trend of exchange rates, the role of further measures taken by a country to aggravate the decline or rise of its local currency exchange rate according to the trend of its own currency cannot be underestimated. (5) Speculation: especially foreign exchange speculation by multinational companies. Sometimes it can make the exchange rate fluctuation exceed the expected reasonable range. (6) Political events: Sudden major political events in the world also have a significant impact on exchange rate changes. The relationship between the above factors is complicated: sometimes various factors come together and work at the same time; Sometimes personal factors play a role; Sometimes the effects of various factors cancel each other out; Sometimes the main function of one factor is suddenly replaced by another. Generally speaking, in a long time (such as one year), the balance of payments is an important factor to determine the basic trend of the exchange rate; Inflation and exchange rate policies only play a subordinate role-enhancing or weakening the role played by the balance of payments; Speculation is not only a comprehensive reflection of the above factors, but also plays a role in fueling the exchange rate trend determined by the balance of payments, aggravating the fluctuation range of the exchange rate; In recent years, under certain conditions, the interest rate level also plays an important role in the fluctuation of a country's exchange rate.