Currency Appreciation
Definition of '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. |
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Investopedia explains 'Currency Appreciation '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. |
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