Appreciation / Depreciation

This formula measures how much a currency’s value has changed relative to its original value. It works by taking the difference between the new exchange rate and the old exchange rate, then dividing by the old rate so the change is expressed as a percentage of the starting point. A positive result means the currency appreciated, while a negative result means it depreciated.

Use this when comparing exchange rates over time, such as tracking whether a currency has strengthened against another currency since a previous date. It is also useful in economics, finance, and trade analysis when you need the percent change rather than just the raw change in rate.

• Using the new rate as the denominator instead of the old rate
• Reversing the subtraction and getting the sign backwards
• Forgetting that a negative percentage means depreciation, not appreciation