The former is to express the price of foreign currency in local currency, while the latter is to express the price of local currency in foreign currency.

For example, USD/RMB is a direct quotation, but the price of foreign currency, namely USD, is expressed in local currency, namely RMB. EUR/USD is an indirect pricing method, that is, the price of the local currency, the euro, is expressed in the foreign currency, the US dollar.

If there is no dollar in the currency pair, it mainly depends on who has the higher status of the two currencies. Euro /HKD is a direct quotation, that is, the euro price expressed in Hong Kong dollars.

Thus, indirect pricing method and dollar pricing method are essentially different, because not all currency pairs contain dollars. Generally, currency pairs containing US dollars are called straight currency pairs, and currency pairs without US dollars are called cross currency pairs.

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