In international economy and trade, to convert a currency pair into another currency, there must be an exchange rate, which is the foreign exchange rate.
Exchange rate, also known as exchange rate, refers to the price expressed by one country's currency in another country's currency, or the price comparison between two currencies. It is usually expressed by the conversion rate between two currencies.
For example, USD 1 = RMB 7.2456, which means the exchange rate between USD and RMB is 1: 7.2456, which means USD 1 needs to be purchased with RMB 7.2456.
In the foreign exchange market, the exchange rate is displayed in five digits, such as:
0.9705 euro
Yen 1 19.95
65438 +0.5237
Swiss franc 1.5003
The minimum change unit of exchange rate is a point, that is, the numerical change of the last digit, such as:
Euro 0.000 1
Yen 0.0 1
0.00065438
Swiss franc 0.000 1
"Point" in foreign exchange rate (basis point)
According to market practice, the price of foreign exchange rate usually consists of five significant figures, counting from right to left, the first one is called "X point", which is the smallest unit of exchange rate change; The second name is "X ten", and so on.
For example: 1 Euro =1.101USD; 1 USD = 120.55 yen
The euro changed from 1. 10 10 to1.10/5, indicating that the euro rose 5 points against the dollar.
USD/JPY changed from 120.50 to 120.00, which means USD/JPY fell by 50 points.
Exchange rate pricing method
I. Direct quotation
The direct quotation method, also known as the payable price method, is a method to express the exchange rate of a unit's foreign currency 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. Namely: base currency/target currency = commodity currency/payment currency = USD/domestic currency.
Second, the indirect price method
Indirect pricing method, also known as accounts receivable pricing method, is a method of expressing the local currency exchange rate of a unit 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. Namely: base currency/target currency = commodity currency/payment currency = domestic currency/US dollar.
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.
Main products and symbols
According to international practice, three English letters are usually used to represent the name of a currency, and the English after the Chinese name above is the English code of the currency.
Rmb =? CNY
Dollar = USD
Pound = pound
Euro = Euro
Yen = Yen
Canadian dollar = Canadian dollar
Swiss franc = Swiss franc
Australian dollar = Australian dollar
NZD = NZD