In forex trading, appreciation refers to an increase in the value of a currency relative to another currency. When a currency appreciates, it can purchase more of the other currency than it could previously. For example, if the EUR/USD exchange rate rises from 1.2000 to 1.2500, the euro has appreciated relative to the US dollar. This means that one euro can now buy more US dollars than before. Appreciation can occur due to a variety of factors, including positive economic data, rising interest rates, or increasing demand for a particular currency. Forex traders may try to profit from currency appreciation by buying the currency before it appreciates and selling it at a higher price.