Currency Appreciation

An increase in the value of one currency in terms of another. Currencies appreciate against each other for various reasons, including capital inflows and the state of a country's current account. Typically a forex trader trades a currency pair in the hopes of currency appreciation of the base currency against the counter currency.

Currency traders have to take into account appreciation when making a trade, since a long-term currency option contract might see its value decline if the value of the underlying currency adjusts. Additionally, as a currency appreciates it becomes more expensive to buy that country's exports. This can cause a contraction in the economy, which can further impact the value of the currency.


Investment dictionary. . 2012.

Look at other dictionaries:

  • currency appreciation — An increase in the value of one currency relative to another currency. Appreciation occurs when, because of a change in exchange rates, a unit of one currency buys more units of another currency. Bloomberg Financial Dictionary …   Financial and business terms

  • Currency War of 2009–2011 — The Currency War of 2009–2011 is an episode of Competitive devaluation which became prominent in September 2009. Competitive devaluation involves states competing with each other to achieve a relatively low valuation for their own currency, so as …   Wikipedia

  • appreciation — Increase in the value of an asset. Bloomberg Financial Dictionary A rise in a currency s value. Chicago Mercantile Exchange Glossary * * * appreciation ap‧pre‧ci‧a‧tion [əˌpriːʆiˈeɪʆn] noun [uncountable] 1. FINANCE an increase in the value of… …   Financial and business terms

  • Currency intervention — is the buying or selling of currency by central banks in an attempt to manipulate the price of a particular currency. Contents 1 Japanese Yen 2 Chinese Yuan 3 United States and the Great Depression …   Wikipedia

  • Appreciation — is a term used in accounting relating to the increase in value of an asset. In this sense it is the reverse of depreciation, which measures the fall in value of assets over their normal life time.Appreciation is a rise of a currency in a floating …   Wikipedia

  • Currency war — Brazilian Finance Minister Guido Mantega, who made headlines when he raised the alarm about a Currency War in September 2010. In July 20 …   Wikipedia

  • Currency of Colombia — Contents 1 Spanish colonial coinage 1.1 1622–1756 Cob coinage (macuquina) 1.2 1756–1822 Milled coinage 1.3 1813–1820 Necessity coinage …   Wikipedia

  • appreciation — 1) An increase in the value of an asset through inflation, a rise in market price, or interest earned. The directors of a company have an obligation to adjust the nominal value of land and buildings and other assets in balance sheets to take… …   Accounting dictionary

  • appreciation — 1) An increase in the value of an asset, through inflation, a rise in market price, or interest earned. The directors of a company have an obligation to adjust the nominal value of land and buildings and other assets in balance sheets to take… …   Big dictionary of business and management

  • Appreciation — An increase in the value of an asset over time. The increase can occur for a number of reasons including increased demand or weakening supply, or as a result of changes in inflation or interest rates. This is the opposite of depreciation, which… …   Investment dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.