Situation 1: A currency is the euro, B currency is the US dollar, and you are an American and hold the euro. Then when the euro depreciates against the dollar, you change the euro in your hand into dollars, and it becomes less. In other words, your dollar-denominated assets will shrink because of the depreciation of the euro.

Situation 2: A currency is RMB, B currency is USD, and you are an American and hold RMB. Then when the RMB appreciates against the US dollar, you will change the RMB in your hand into US dollars, which means that your assets denominated in US dollars will increase due to the appreciation of the RMB.

Let me talk about China's foreign exchange reserves. China holds a large amount of US dollar foreign exchange reserves. When the RMB appreciates against the US dollar, those US dollars will decrease, so this is the problem that China's foreign exchange reserves shrink as claimed by the media. The reality is that China's foreign exchange reserves cannot be simply converted into RMB by the central bank, but can only be used overseas. The dollar is depreciating against major currencies, so the purchasing power of the dollar has declined, such as buying oil and gold, but not as much as before. However, the total amount of US dollars is still increasing, and the return on investment is still positive, that is to say, the number (nominal face value) is still increasing, so this is why SAFE always comes out to rumor that the US dollar reserves have not shrunk.