The Spot Market – Conventions
Denote the spot rate as S
For most currencies, use 4 decimal places in calculations
With exceptions: i.e. S(¥/$) = 109.0750, but S($/¥) = 0.009168
If we are talking about the US, always quote spot rates as the dollar price of the foreign currency
i.e. as direct quotes, S($/£) , S($/C$) , S($/£) , etc
Increase in the exchange rate => the US dollar is depreciating
Costs more to buy 1 unit of foreign currency
Decrease in the exchange rate => the US dollar is depreciating
Costs less to buy 1 unit of foreign currency