The foreign exchange market
Foreign Exchange (Forex, FX, or
currency market) is a global foreign exchange spread. To do this, including all
aspects of purchasing, sale and exchange of currency at current prices or
determine. Trade volume was by far the largest market in the world. The
main players in this market is the biggest international banks. World financial
center as the anchor point for a wide range of different types of buyers and
sellers communicate every day, except on weekends. Currency market does not
determine the relative values of different currencies, but the current market
value of a currency is the price of need each other.
Foreign exchange market through the
operation of financial institutions and work on different levels. Behind the
scenes, banks with less financial enterprises, known as the
"resellers", who are active in a large number of foreign exchange
transactions. Most of the Forex trading Bank, so this market, behind the scenes
"interbank market", is sometimes referred to, although some insurance
companies and other financial firms. Trade Forex trading can be enormous and
hundreds of millions of dollars. Because the problem of sovereignty, if it
involves two currency exchange regulatory entity (if applicable).
The Forex market is the equivalent of
international trade and investment, allows you to convert the currency. For
example, you can explain in United States imports from the Member States, in
particular members of the eurozone and the euro to pay even if their revenue in
dollars. It also supports the direct viewing and rating values of coins and the
carry trade, speculation based on interest rates between the two currencies.
In a typical Exchange, buying a
currency amount and a certain amount of another currency. The modern foreign
exchange market began in 1970 after 30 years of government restrictions on
foreign currency transactions (Bretton Woods monetary management system
establishing rules for the developed world business and financial relations
after the second world war), through the gradual floating exchange rates from
the previous exchange rate system remained fixed in the Bretton Woods system.
The foreign exchange market is
characterized by the following elements:
The bulk of their trade, resulting in
high class is the main asset of the world represent mobility;
Geographical scope;
Their continuous operation: 24 hours
a day, except on Sundays, Sunday sales until Friday (New York); 22:00 22 h 00
GMT Greenwich mean time (Sydney)
Many factors influence Exchange
rates;
Compared with other stock market
profit rate fixed low incomes;
Use to the size of the increase and
the profit and loss account.
It is referred to as close to the
ideal perfect competition, despite the currency market intervention by the
Central Bank.
According to the Bank for
international settlements, foreign exchange and OTC derivatives of the
triennial Central Bank survey preliminary results show the campaign in 2013
than the overall average daily foreign exchange transactions of $ 5 trillion
300 billion market in April 2013. It comes to $ 4 trillion in April 2010 and
200 billion per day, followed by more actively traded instruments in 300,000,002,007
April April 2013 to $ 2.2 $ 3 trillion. Swap $ 2 trillion of currencies direct.
According to the Bank for international settlements, from April 2010 the
daily average turnover, it is estimated that $ 3 trillion global currency
markets 980 billion, an increase of about 210 billion daily 20%$ 3 trillion in
April 2007. On the foreign exchange markets several special studies of average
daily turnover of more than $ 4 trillion. The $ 3 trillion 980 billion, as
follows:
$ 1 trillion 490 billion special
operations
US $ 475 billion in outright forwards
$ 1 trillion 765 billion currency
swap
43 billion dollar currency swap
US $ 207 billion in options and other
products
