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Two currencies have a certain value relationship to each other. One of them is the reference currency with a certain value and the other currency is set in relation to it, depending on its value. The corresponding values change in relation to each other. Also in the foreign exchange market a change takes place through supply and demand. If the one currency is in strong demand, it increases in value. If however the supply exceeds the demand, also at the foreign exchange market the value of this currency gives way opposite the other currency.

An important indicator of how the exchange rate of the currency changes is the key interest rate of the respective country. The higher a country's key interest rate is, the more capital flows into the respective currency and the more the currency appreciates. A change in the key interest rate not only has serious effects on the foreign exchange market, but also on the stock and commodity markets.

It is therefore important to suspend activities on the foreign exchange market before making a key interest rate decision for the most important currencies or, in the case of ongoing campaigns, to combine this with hedging.

As with all legal transactions, foreign exchange trading transactions are based on both performance and consideration. Here, for example, dollars are exchanged for euros or dollars for yen.

Here the exchange rates in the so-called currency pairs (also called price quotation) are given. Then the source currency (for example, exchange from dollar to euro, here dollars) becomes the base currency and the target currency (the euro) becomes the quote currency.

In addition to the pure exchange ratio, there is also a note of the codes (the so-called ISO 4217 code) of the respective currencies - i.e. source and target currency. This is done either with a separating symbol or with a slash or a dot. The exchange rate is often indicated with 5 significant digits.

Example: display 1 () 2345/B.Q)

Here, for an equal amount of base currency, you get more from the target currency when the exchange rate increases. If the exchange rate goes down, the reverse is true.