forex market
Exchange operations with money began to take a very long time - since the time of the money and the beginning of trade relations between different countries, shipping and travel.
The departing of the twentieth century was a period of formation of the market of Finance in the modern sense of the word. The chronicle of this stage will be empty and colorless, if you delete from her story about the Forex market.
Name Forex or FX) is derived from the English word «Foreign exchange market». But Forex can call the exchange, in the sense given to this concept, having in mind the availability of the trading platform and the certain standards of trade. These moments are absent in this case. Rather talk about the interbank market, dealing with investment, speculative and trading operations with currencies of different countries with the help of a number of over-the-counter institutions.
Trades are actively conducted in the USA, Japan and great Britain. Works the market continuously, without interruption. Morning Forex meets in Asia. Then trading opened in Europe, and then - on the American continent. All the operations of the forex market are carried out in the mode of «real time» on the phone or with the help of computer terminals.
Today it is the largest in the world financial market. Trade turnover for the day may exceed the integrated indicators of all the other exchanges.
The main currencies in the forex market are us dollar (USD), referred to as the slang of the financiers of «greenbacks» or «dolly», the Euro (EUR), British pound (GBP), Swiss franc (CHF) and the Japanese yen (JPY). Attention do not bypass well as canadian (CAD), new Zealand (NZD) and the Australian (AUD) dollars.
These currencies have a rather stable position on the global financial market. But there are some political and economic factors influencing the change of a rate of one or another currency. Let's consider them.
First of all, the indicators of the economic status of the country: the level of GDP growth and the scale of industrial production, the degree of dependence on foreign raw material sources, the growth rate of money in the domestic market and the level of accompanying inflation. Takes into account the level of interest rates and the extent to which developed different sectors of the market of the Finance. For example, securities. Important indicators such as the solvency of the state and the attitude of the international market for its currency.
To understand, what is the currency exchange rate, can be an example of import and export. So, the higher the price of the goods, made in one or another country, in comparison with the similar foreign, the larger the share of imports. But because the company is forced to buy foreign currency, that is, the demand for it is growing. The difference between internal and external price of the product, thus, becomes the main factor of change rate of the two currencies.
The courses affects the movement of capital. If securities or loans other countries are in demand, then the price of the national currency is growing. And on the contrary.
The rate of exchange on the forex market rises or falls depending on how he feels, the economy of the state, the currency of which is quoted on the international market. A simple example: the crisis in the United States led to the weakening of the U.S. dollar.
Affect the exchange rates financial funds, which determine the vector of their moving depending on how trying to increase their capital. And most of all - the Central banks located in the Department of state. As they set their course, making exchange transactions. Such a policy helps to improve the development of production and helps regulate the growth of inflation.
Operations on the forex market, are carried out with the help of the Central and commercial banks, insurance companies, pension funds and other financial institutions, brokers, corporate clients, individual investors, etc. Each of the participants has its own trading volume. The biggest Central banks.
Their role is to regulate credit and cash flow, which is aimed at holding the possibilities of the light of realization of products of the national market. The strongest impact on the forex market is provided by the European Central Bank (ECB), the Bank of Japan (BOJ), the Federal reserve system of the United States of America (FED) and the Bank of England (BOE).
Commercial banks have the right to take deposits from private persons and legal entities and to manage these funds (up to the moment of return) in its sole discretion. Their role in the turnover of the forex market is great, since the commercial banks actively to other financial institutions conducting foreign currency exchange transactions.
Brokerage company acts as an intermediary between the buyer and the seller of the currency. And for that receive a certain percentage of the transaction.
The dealing of the company - also the mediators. But between commercial banks and private individuals, with a small amount.
Private traders also have a work on the forex market. They êîíâåðñèðóþò wages, demand for one or another currency, intended for tourism or the purchase of foreign goods.
the forex market is markedly different from the other. From the futures market, for example, the fact that the quotations at Forex represent the price of the currency pair at a specific period of time. Quotations of futures on the same - it is the future price, which will become valid at the moment of delivery. Fixed spread when there is no trading. There are only changing the difference between the sale price and the purchase price, which is determined by the order marked by the customer, and is formed by those who make in the auction participation. And one more difference: the quotes on futures on some currencies (Japanese yen, Swiss franc, canadian dollar) - direct. For the Forex market they reverse.
the forex market has the advantages, which enabled him to become a leader. We have in mind the high level of liquidity, dynamism, efficiency, availability, optimal price of the deals, the uniqueness of quotations, flexible regulation and availability of margin trading.
The high level of liquidity of the forex market is manifested in the fact that the number of those wishing to buy or sell cash is always great. Problems with opening/closing positions does not arise. Indicator is the trade volume - every day he is equal to 1,5-3 trillion dollars.
Efficiency - this is the flag of the forex market, because the work is going on around the clock. This means that you can trade at any convenient time (except for a few public holidays). This is the availability of the interbank market.
The dynamism of the forex market is that a huge profit can be obtained in just a few minutes. But you can't get it after a long wait. The modern world of Finance fickle and constantly threatens to crises. However, the high speed of changes, taking place in the forex market, will not be a big risk.
forex market has a certain direction. It manifests itself in the following: each currency is changed according to its own laws, which can be calculated with the passage of time. That is why investors are able to manipulate market operations, taking into account the forecasts of experts.
