Exchange rate is a price of domestic currency in the terms of foreign currency. In exchange rates there are two components in the exchange rates one is domestic currency and other is foreign currency. Exchange rates are quoted in direct or indirect. When a one unit value of foreign currency is quoted in domestic currency is known as direct quote and if one unit value of domestic currency is quoted in foreign currency it is known as indirect quote. Usually quotes are given in Dollar terms, there can also be quoted in other foreign currency which is known as cross currency.