AuthorTopic: fx rate question
@2005-04-15 16:06:08
I cannot get through my thick skull which interest rate is the "foreign" rate and which is the "domestic" rate. When given a direct quote (amount of domestic currency per unit of foreign currency), for example $1.0435 Euro, is the USD always the foriegn and Euro the domestic since we're quoting "per unit of Euro"? Or does it depend on which country you are in?
@2005-04-18 23:01:26
which country you are in is irrelevant. consider it like buying a product. our product (the Euro) is listed as $1.0435 dollars per piece.
other way around, if the product we wish to buy is a dollar, the cost is 0.95831 euro
@2005-04-19 11:28:43
Thanks. This is pretty sad, considering I used to be an FX trader (about 13 years ago). I used to be able to simply look at the interest rate diffs and tell if one was overpriced or not. My how the mighty have fallen!!
@2005-04-28 15:24:41
In the case of 1.0435 $/Euro, if this is quoted in direct quotes (i.e. DC/FC) then DC is USD and FC is Euro. Hope this helps.

CFA Discussion Topic: fx rate question

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