exchange rate

Remittance refers to the ratio between the currencies of two countries.

Usually, it is used to calculate the amount needed to convert one currency into another.

For example, if the exchange rate of USD to JPY is 1 USD to JPY1USD, you will get JPY 1 1000 USD.

How to use exchange rate indicators?

Exchange rate is a very important economic indicator, because it can reflect the value of one country's currency relative to other countries' currencies.

The following are some examples of using exchange rate indicators:

international trade

If a country's currency appreciates, the price of its export commodities will become more expensive, which may lead to a decline in its competitiveness in the international market. On the contrary, if the currency depreciates, exported goods will become cheaper, which will help to increase exports and improve international competitiveness.

foreign direct investment (FDI)

If a country's currency appreciates, foreign investors will have to pay more local currency to buy its assets, which may reduce its attractiveness. On the contrary, if the currency depreciates, foreign investors will have to pay less local currency to buy the country's assets, which may enhance the country's attractiveness.

What is the impact of exchange rate changes on the stock market?

Exchange rate changes will have a certain impact on the stock market. The following are some possible effects: export companies will benefit, and the prices of damaged export commodities of import companies may fall, which will help improve the competitiveness of export companies and thus promote stock price growth. On the contrary, the price of imported goods will rise, which will affect the profitability of importing companies, thus affecting their share prices.

The interests of transnational corporations

May benefit from currency depreciation. Because it can convert foreign currency income into more local currency and increase income and profitability.

The influence of economic cycle and the change of exchange rate can reflect a country's economic situation. If the currency appreciates, it may indicate that the economic situation is relatively stable, thus enhancing investors' confidence and contributing to the stability of the stock market. On the contrary, if the currency depreciates, it may indicate that the economic situation is unstable and may have a certain negative impact on the stock market.