What does "appreciation" signify in an economic context?

In an economic context, "appreciation" refers to the increase in value of an asset, currency, or investment over time. When something appreciates, it signifies that its worth has risen compared to its previous value. This can occur due to various factors such as increased demand, improved fundamentals, or favorable market conditions. For example, if the value of a currency appreciates, it means that it can buy more foreign currency than it could before, indicating strength in that currency. This concept is crucial in financial markets, as it affects investment decisions and economic indicators. The idea of appreciation is often contrasted with depreciation, which denotes a decrease in value, making it clear that appreciation specifically highlights value growth.