What does exchange rate appreciation mean
Currency depreciation is the loss of value of a country's currency with respect to one or more foreign reference currencies, typically in a floating exchange rate system in which no official currency value is maintained. Currency appreciation in the same context is an increase in the value of the currency. Short-term changes in the value of a currency are reflected in changes in the exchange rate. Country exchange rates are provided in both nominal and real terms. The nominal exchange rate is simply the purchase price of a dollar in terms of foreign currency. The real exchange rate adjusts the nominal rate for differences in the growth of prices, and is thus the measure used to evaluate the competitiveness of U.S. exports abroad.