Currency Conversion Glossary: USD to CNY

A

• Appreciation:

  Increase in the value of a currency relative to another, such as when Yuan strengthens against the Dollar.

B

• Base Currency:

  The first currency listed in a currency pair. (Example: USD in USD/CNY)

• Bid Price:

  The price at which you can sell currency to a market maker or bank.

C

• Central Bank:

  A national bank controlling monetary policy. For CNY, this is the People's Bank of China (PBoC); for USD, it's the Federal Reserve (Fed).

• Cross Rate:

  The exchange rate between two currencies, calculated from their common relationships with a third currency.

• Currency Converter:

  A tool used to calculate equivalent amounts between two different currencies.

• Currency Pair:

  Two currencies quoted together, such as USD/CNY.

D

• Depreciation:

  Decrease in the value of a currency relative to another, such as when the Dollar weakens against the Yuan.

• Devaluation:

  A deliberate downward adjustment of a country's currency by its government.

E

• Exchange Rate:

  The value of one currency expressed in terms of another (e.g., 1 USD = 7.2 CNY).

F

• Foreign Exchange (Forex, FX):

  The global marketplace for exchanging currencies.

• Fixed Exchange Rate:

  A regime where the currency's value is pegged or fixed to another currency or basket of currencies.

• Floating Exchange Rate:

  A currency valuation method determined by the market rather than a fixed peg.

I

• Interbank Rate:

  The wholesale exchange rate banks use when trading large amounts.

• Inflation:

  The rate at which prices increase over time, affecting currency value.

M

• Mid-Market Rate:

  The midpoint between buy and sell prices in currency trading, often used as a reference for exchange rates.

O

• Offshore Yuan (CNH):

  Chinese Yuan traded outside mainland China, especially in Hong Kong.

• Onshore Yuan (CNY):

  Chinese Yuan traded within mainland China.

P

• Pegged Currency:

  A currency whose value is fixed or tied to another currency or basket of currencies.

• Pip:

  The smallest incremental price move in currency exchange rates.

R

• Revaluation:

  Upward adjustment of a currency's value relative to others, opposite of devaluation.

• Renminbi (RMB):

  The official currency of China; Yuan (CNY) is the unit of RMB.

S

• Spot Rate:

  The current exchange rate at which a currency can be immediately exchanged.

• Spread:

  The difference between the bid price and ask price in currency exchange.

U

• USD (United States Dollar):

  The official currency of the United States, widely used internationally for trade.

V

• Volatility:

  The frequency and magnitude of price movements in currency markets.

Y

• Yuan (CNY):

  The basic monetary unit of the Renminbi, China's official currency.