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in direct quote selling would be lower,buying will be higher,indirect vice versa.why selling is not always higher??may i know the logic in it
if direct quote is given ie;local currency /foreign currency cant we make the quote indirect dividing it by by 1??
foreign currency- $ local- pound 1.3167 pound /$
can we make indirect 1/1.3167? —>0.759$/poundFirst, direct and indirect don’t mean anything without knowing which country you are in.
As to which rate to use – I spend a lot of time on this in my first lecture on foreign exchange risk management, and explain the logic.With regard to changing the quote against one currency into a quote against the other currency – yes, you divide the quote into 1, and your example is correct.
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