# How to properly understand an exchange rate

I am having an enormous amount of confusion on exchange rates.

If for example , i have an exchange rate of £/\$=1.10, i know that with one pound i can buy 1.10 dollars. First question: So can the exchange rate be written as 1.10\$?.

Now, in terms of appreciation and depreciation:

lets say that the exchange rate increases to £/\$=1.20.

On investopedia i read that: As a rule of thumb, the increase or decrease of a rate always corresponds to the appreciation/depreciation of the base currency, and the inverse corresponds to the quoted currency.

So according to investopedia, the pound has appreciated.

But then i read another article that states:

if you have an exchange rate quoted as X/Y,

If X/Y goes up then Y appreciated..

If X/Y goes down then Y depreciated..

Can somebody tell me in simple terms how to understand what currency is appreciating/depreciating ? And can somebody please answer my first question?

EDIT: this is not a dupe. I am trying to understand how to read exchange rates and why two articles give opposing answers on the same topic.

If you look further down the second thread you link to, it says:

CFA Institute’s convention is USD/GBP 1.5253 means \$1.5253 = £1.0.

This is not the standard convention. Your first link does use the standard convention, which is why they seem to give contradictory results.

• Thanks! Greatly appreciate it. I may have another question : if , for example, In 1999, the euro was valued at \$1.18, and on On June 16, 2016, it was valued at \$1.1132, then the Euro has depreciated and the USD has appreciated. Then can i write the exhange rate for 1999 as EUR/USD=1.18? Or should i right it as EUR/USD=1.18\$? (meaning should i add the dollar sign at the end).
– GGGG
Commented Nov 25, 2019 at 15:56
• No dollar sign needed. Wikipedia gives a decent overview of the syntax. Commented Nov 25, 2019 at 16:00
• But then its right to say that the exchange rate is EUR/USD and not USD/EUR, correct?
– GGGG
Commented Nov 25, 2019 at 16:24
• That is correct. Commented Nov 25, 2019 at 16:27