"Inversion": 1. A term used in foreign exchange rate quotation. Consider the historical FX quote of 1 GBP = USD 1. 4598 - 1. 4602. The base currency is GBP. The inversion of this FX quote means expressing the same price, but with the other currency as the base currency (USD here). So 1 USD = GBP [1/1. 4602] - [1/1. 4598] 1 USD = GBP 0. 6848 - 0. 6850. 2. In any market, the reversal of a normal - or commonly expected - relationship. For example the situation of an Inverse yield curve, where longer maturities of funds are trading at LOWER yields than shorter-dated maturities (being the opposite of the normally expected upward-sloping relationship).
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