How the exchange rate influences bid/ask prices?
Exchage rate is the value of one currency compared to another, right?
Bid price is the price you sell to market
Ask price is the price you buy from market
My question is how do they relate?
There is not really one single exchange rate for a currency, as it depends on whether you are buying or selling it as you have pointed out. But sometimes to keep things quick and simple a source will refer to a price as the exchange rate which is actually just the average of the bid and ask - sometimes called the mid-price.
Of course, you cannot either buy or sell at the mid-price, you have to abide by the bid or ask. The difference between bid and aks is the spread. The spread will be narrow for high volume pairs with large currencies like EUR and USD, and wider when exotic currencies, like PLN and TRY and MXN, are involved. Spreads also expand at times of market volatility, low volume (such as after both London and NY business hours), relevant news announcements etc.
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Thank you for the profound answer. It was bagging me for a while 