Market participants
The foreign exchange market in
access levels is divided in contrast to stock markets. Top is the interbank
market, big commercial banks and securities institutions. In its communication
of interbank market is that the difference between the purchase price and the
price was right, I don't know this player outside the circle. The differences
between prices and extend (for example a currency like the Euro 0-1 1-2), at a
lower level of access. This is due to the volume. May a large number of
providers for large transactions by making available, you must purchase the
small differences in price and the price, which is called a better
distribution.
Is the access level for the exchange of size
"lines" (a sum of money in negotiations). Provides the first level of
all transactions on the interbank market of 39%. from there smaller banks, followed by large multinational
companies (risk and need to pay employees in different countries), covering
large funds and also the retail market. Otelul Galati and Melvin, pensions,
insurance, mutual funds and other institutional investors a role in financial
markets in General and sold coins, especially since the beginning of this
century. " (2004) also States: "developed by hedge funds heavily in
the period 2001-2004, the total number and size in. Also in the foreign
exchange market by the Central Bank to participate, make their economic needs.
An important part of the
foreign exchange market by companies, were foreign currency for payment of
financial services businesses. Commercial enterprises are often a relatively
small number of banks or speculators, and its local offices often in this short
term difficult to influence market interest rates. But the direction of trade
flows, the exchange rate is an important factor for a long time. Some
multinational companies (MNCs) can have unpredictable impact when positions at
a great risk to other market participants, are not known.
The Central Bank
National central banks in the
currency market on paper. They tried to control the money supply, inflation and
interest rates or/and taxes often officials or currency is not the official
target. You can market often considerable and stable foreign currency reserves.
However, the effect of "stabilizing speculation" is the Central Bank
of questionable because they make huge losses, as well as other drug dealers,
there is no convincing evidence that commercial benefits of the Central Bank
will not be disturbed.
The currency system
The currency is the exchange rate
of the National Bank of the country. This idea is the rate fixed by the Central
Bank and the exchange rate, to evaluate their behavior. Fixed exchange rate
reflects the real value of market equilibrium. Banks, distributors and traders
as the market flat trend indicator.
Speech by rumors of Central Bank
or right boxes can be enough to stabilize the currency, but an active
intervention can be used several times a year in the State of floating exchange
rate system. Be the failure of the objective of the Central Bank. Integrated
marketing resources can easily overwhelm any Central Bank. the observation of this kind on the collapse
mechanism of change in 1992-1993, the last few scenes in Europe and Asia.
Hedge fund speculators
About 70% -90% of currency
trading is speculative. This means that the person or organization without
money to buy or sell; In contrast to the last delivery schedule rate, only in
the movement of money in gambling, among other things. Since 1996, the hedge
fund has a reputation for aggressive currency speculation. Net worth of $ 100
million or more, to borrow billions of dollars, so that interventions can be
overwhelming the various tax
