I am having some issues understanding how to read exchange rates. E is the exchange rate
I read online that if we have for example E\$/€, then the base currency in this case is the dollar and the quote currency is the euro . In this case , if E\$/€ = 1.50, this would mean that 1$ would buy 1.50€.
However, in my textbook i am having some miss understandings. In my textbook , the domestic currency is the EURO and the foreign currency is the DOLLAR.
It states : The exchange rate can be defined in two ways, the first one being
1) The price of the domestic currency (euro) in terms of the foreign currency (dollar). If 1€ =$1.50 , then E=\$/1€=1.50.
If i look at E=\$/1€=1.50 , i see E\$/€.
This implies how in this case, the base currency , orelse 1€, is written as a the second currency , and E\$/€= 1.50 . With one euro you can buy 1.50 dollars.
2) The second way of writing the exchange rate is the price of the foreign currency in terms of the domestic currency . In this case E=€/\$= €0.65 . In this case, the base currency is also written as the second currency , with 1 dollar being able to buy 0.65 euros.
Then my questions is that i'm not sure why there are different ways of writing the exxhange rate. On internet E\$/€=1.50 means that with one dollar you can buy 1.50 euros. In my textbook, E=\$/1€=1.50. , which i assume is the same thing as E=\$/€= 1.50 means that with 1 euro you can buy 1.50 dollars.
What am i misenterpeting ?