Finocturne
Macroeconomics

Exchange Rates & Currency Changes

Track explicit USD/TWD quote directions and distinguish quote changes from reciprocal currency-value changes.

Question, try, then observe

From 32 to 30: which currency appreciates?

Choose your home currency, invert the quote and adjust the rates to observe currency values and conversions.

Hypothetical teaching scenario; results update immediately.

Quote direction
TWD per 1 USD · Direct quote
One currency unit, two-period quotes
Initial quote32 TWD / USD
New quote30 TWD / USD
USD → TWD value change
-6.25%
TWD → USD inverse value change
6.67%

TWD / USD

(3032−1)×100%≈-6.25%

Inverse currency value change

(3230−1)×100%≈6.67%

Assume a fixed 100 USD import price and export receipt: both import cost and converted export revenue go from 3,200.00 to 3,000.00 TWD. TWD changes 6.67% against USD; USD changes -6.25% against TWD.

Fixed 100 USD amounts isolate conversion; no fees, hedging or demand response.

What did you just see?

A fixed 100 USD import costs 3,200 then 3,000 TWD. A fixed 100 USD export receipt also converts to 3,200 then 3,000 TWD, excluding fees or price adjustments.

Conversion assumptions

Foreign-currency amounts stay fixed across periods. The example isolates conversion effects without spreads, fees, hedging, pricing or demand responses. Rates are hypothetical, not live quotes or forecasts.

Another example

  1. Choose home currency and quote direction; enter initial 32 and new 30 TWD per USD.
  2. Quote change uses (30−32)/32.
  3. TWD’s reciprocal change uses (32−30)/30. Toggling quotes reciprocates both periods and preserves the scenario.
Show formal definition and formula

An exchange rate expresses one unit of a currency in another currency. Every value needs a quote direction; reciprocal quote changes have different denominators.

Quoted currency value change

Inverse currency value change

An exchange rate expresses one unit of a currency in another currency. Every value needs a quote direction; reciprocal quote changes have different denominators.

q0
Initial quote: counter-currency value per unit of base currency
q1
New quote, using the same direction as the initial quote
c
Value change of the selected base currency against the counter currency
cinv
Value change of the counter currency against the base currency
Units
q uses the selected units: TWD / USD is TWD per 1 USD. c uses decimals, so 0.05 displays as 5%; reciprocal changes are generally not equal and opposite.

Common mistakes

A lower quote does not mean both currencies depreciate. Direct quotation is home currency per unit of foreign currency; indirect quotation is foreign currency per unit of home currency. Choose the home currency first. The two percentage changes are generally not equal and opposite.

Frequently asked questions

Can rates be zero or negative?

No. Both rates must be positive for conversion and reciprocal values to be defined.

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You can now explore…

  • Identify the quote direction and home currency
  • Compare quote and inverse-change denominators
Term reference1 terms

Open a term when you need a reminder. Underlined words in the article work too.