Definitions

Exchange Rate: the price of one currency in terms of another currency, such as converting Euros to USD.

Appreciation: when the value of a currency increases relative to another currency; occurs when you need more of another currency to buy a single unit of a certain currency.

Depreciation: when the value of a currency decreases relative to another currency; occurs when you need less of another currency to buy a single unit of a currency.

Source: 123RF