Time For Forex | vibesoundtz.blogspot.com
1, what is foreign exchange
Foreign exchange, that is, foreign currency or foreign currency that can be used for international settlement payment means. Article 3 of the Regulations on Foreign Exchange Administration promulgated in 1996 made the following provisions for foreign exchange: Foreign exchange means: foreign currency. Including paper money, coinage. foreign currency payment vouchers. Including bills, bank payment vouchers, postal savings vouchers, etc. Foreign currency securities. Including government bonds, corporate bonds, stocks and so on. SDR, European currency unit. other foreign currency value of the assets.
2, exchange rate and pricing methods
Exchange rate, also known as the exchange rate, refers to a country currency to another country currency price, or that is the price between the two currencies.
In the foreign exchange market, the exchange rate is displayed in five digits, such as:
Euro EUR 0.9705
JPY 119.95
GBP 1.5237 GBP
CHF 1.5003
The minimum unit of exchange rate for the point, that is, the last digit of a digital change, such as:
Euro EUR 0.0001
JPY 0.01
GBP 0.0001
CHF 0.0001
According to international practice, usually with three letters to express the name of the currency, the Chinese name after the English is the currency of the English code.
3, direct price method and indirect price method
There are two ways to price the exchange rate: direct and indirect.
(1) direct price method
Direct price method, also known as the payable price method, is a certain unit (1,100,1000,10000) of foreign currency as the standard to calculate how many units of domestic currency. It is equivalent to calculate the purchase of a certain unit of foreign currency to pay the number of local currency, so called to pay the price method. The vast majority of countries in the world, including China, now use direct pricing. In the international foreign exchange market, the yen, Swiss francs, Canadian dollars, etc. are direct price method, such as the yen 119.05 that is a dollar against 119.55 yen.
In the direct price method, if a unit of foreign currency equivalent to the amount of local currency more than the previous period, then the increase in foreign currency or local currency value fell, called the foreign exchange rate rise; the other hand, if you want to use less than the original currency that can be converted to the same The amount of foreign currency, which means that foreign currency currencies fell or the local currency rose, called the foreign exchange rate fell, that is, the value of foreign currency and the exchange rate is proportional to the ups and downs.
(2) indirect price method
Indirect price method, also known as receivable price method. It is a unit (such as a unit) of the national currency as a standard to calculate the number of units receivable foreign currency. In the international foreign exchange market, the euro, sterling, Australian dollar, etc. are indirect price method. Such as the euro 0.9705 that is a euro against 0.9705 US dollars.
In the indirect price method, the amount of the national currency remains unchanged, and the amount of foreign currency varies with the change in the currency of the national currency. If a certain amount of local currency can be converted into foreign currency less than the previous period, indicating that the foreign currency currency increases, the local currency decreases, that is, the foreign exchange rate decline; the other hand, if a certain amount of local currency convertible foreign currency more than the previous period, , The increase in the local currency, that is, the rise in foreign exchange rates, that is, the value of foreign currency and the exchange rate is inversely proportional to the increase.
Forex market quotations are generally two-way quotes, that is, by the bidder at the same time reported their own purchase price and selling price, by the customer to decide the direction of the sale. The smaller the bid price and the selling price, the less the cost for the investor. Interbank transactions offer spreads normally 2-3 points, banks (or traders) to the customer's offer spread varies according to various circumstances, the current foreign margin trading offer spreads in the basic 3-5 points, Hong Kong in the 6- 8 points, the domestic bank firm trading at 10-40 points range.
4, the world's major foreign exchange market
Foreign exchange market refers to the banks and other financial institutions, self-employed traders, large multinational companies involved, through intermediaries or telecommunications systems linked to a variety of currencies for the sale of the object market. It can be tangible - such as foreign exchange exchanges, it can be invisible - such as through the telecommunications system transactions of inter-bank foreign exchange transactions. According to the latest statistics of the Bank for International Settlements, the average daily trading volume of the international foreign exchange market is about $ 1.5 trillion.
At present, there are about 30 major foreign exchange markets in the world, all over the different continents of different countries and regions. According to the traditional geographical division, can be divided into Asia, Europe, North America and other three parts, of which the most important are Europe, London, Frankfurt, Zurich and Paris, the Americas New York and Los Angeles, Sydney, Australia, Tokyo, Singapore and Hong Kong.
Each market has its fixed and unique features, but all markets are common. The markets are separated by distance and time, and they are sensitive to each other and are independent. After a center is opened every day, the order is passed to another center, sometimes for the next market opened the tone. These foreign exchange markets are centered around their cities and radiate around other countries and regions. As the time zone is different, the foreign exchange market in the business hours of the opening, followed by listing business, they are through each other through advanced communications equipment and computer networks into one, the market participants can trade around the world , Foreign exchange funds flow smoothly, the exchange rate between the market is very small, the formation of a global operation, all-weather operation of a unified international foreign exchange market. The simple situation can be seen in the following table:
Region City Time to Market (GMT) Closing Time (GMT)
5, the reasons for the foreign exchange market
The foreign exchange market refers to the place of trading in foreign exchange trading, or the place where the various currencies are exchanged with each other. The reason why the foreign exchange market exists, because:
- Trade and investment
Import and export goods in the import of goods to pay a currency, and in the export of goods to collect another currency. This means that when they settle their accounts, they pay in different currencies. Therefore, they need to own part of the currency received into a currency can be used to buy goods. Similarly, a company that buys foreign assets must pay in the currency of the country, so it needs to convert its currency into the currency of the country.
- speculation
The exchange rate between the two currencies will change as the supply and demand between the two currencies change. The trader buys a currency at an exchange rate and throws the currency at another more favorable exchange rate, and he can make a profit. Speculation accounts for the vast majority of foreign exchange market transactions.
- hedge
As a result of fluctuations in the exchange rate between the two related currencies, those companies that own foreign assets (such as factories) may be exposed to risks when they convert these assets into their national currencies. When the value of a foreign asset in foreign currency is constant for a period of time, the profit or loss is generated if the exchange rate changes and the value of the asset is converted in domestic currency. The company can hedge this potential profit and loss by hedging. This is the implementation of a foreign exchange transaction, the transaction results just offset by the exchange rate changes arising from the gains and losses of foreign currency assets.
Foreign exchange, that is, foreign currency or foreign currency that can be used for international settlement payment means. Article 3 of the Regulations on Foreign Exchange Administration promulgated in 1996 made the following provisions for foreign exchange: Foreign exchange means: foreign currency. Including paper money, coinage. foreign currency payment vouchers. Including bills, bank payment vouchers, postal savings vouchers, etc. Foreign currency securities. Including government bonds, corporate bonds, stocks and so on. SDR, European currency unit. other foreign currency value of the assets.
2, exchange rate and pricing methods
Exchange rate, also known as the exchange rate, refers to a country currency to another country currency price, or that is the price between the two currencies.
In the foreign exchange market, the exchange rate is displayed in five digits, such as:
Euro EUR 0.9705
JPY 119.95
GBP 1.5237 GBP
CHF 1.5003
The minimum unit of exchange rate for the point, that is, the last digit of a digital change, such as:
Euro EUR 0.0001
JPY 0.01
GBP 0.0001
CHF 0.0001
According to international practice, usually with three letters to express the name of the currency, the Chinese name after the English is the currency of the English code.
3, direct price method and indirect price method
There are two ways to price the exchange rate: direct and indirect.
(1) direct price method
Direct price method, also known as the payable price method, is a certain unit (1,100,1000,10000) of foreign currency as the standard to calculate how many units of domestic currency. It is equivalent to calculate the purchase of a certain unit of foreign currency to pay the number of local currency, so called to pay the price method. The vast majority of countries in the world, including China, now use direct pricing. In the international foreign exchange market, the yen, Swiss francs, Canadian dollars, etc. are direct price method, such as the yen 119.05 that is a dollar against 119.55 yen.
In the direct price method, if a unit of foreign currency equivalent to the amount of local currency more than the previous period, then the increase in foreign currency or local currency value fell, called the foreign exchange rate rise; the other hand, if you want to use less than the original currency that can be converted to the same The amount of foreign currency, which means that foreign currency currencies fell or the local currency rose, called the foreign exchange rate fell, that is, the value of foreign currency and the exchange rate is proportional to the ups and downs.
(2) indirect price method
Indirect price method, also known as receivable price method. It is a unit (such as a unit) of the national currency as a standard to calculate the number of units receivable foreign currency. In the international foreign exchange market, the euro, sterling, Australian dollar, etc. are indirect price method. Such as the euro 0.9705 that is a euro against 0.9705 US dollars.
In the indirect price method, the amount of the national currency remains unchanged, and the amount of foreign currency varies with the change in the currency of the national currency. If a certain amount of local currency can be converted into foreign currency less than the previous period, indicating that the foreign currency currency increases, the local currency decreases, that is, the foreign exchange rate decline; the other hand, if a certain amount of local currency convertible foreign currency more than the previous period, , The increase in the local currency, that is, the rise in foreign exchange rates, that is, the value of foreign currency and the exchange rate is inversely proportional to the increase.
Forex market quotations are generally two-way quotes, that is, by the bidder at the same time reported their own purchase price and selling price, by the customer to decide the direction of the sale. The smaller the bid price and the selling price, the less the cost for the investor. Interbank transactions offer spreads normally 2-3 points, banks (or traders) to the customer's offer spread varies according to various circumstances, the current foreign margin trading offer spreads in the basic 3-5 points, Hong Kong in the 6- 8 points, the domestic bank firm trading at 10-40 points range.
4, the world's major foreign exchange market
Foreign exchange market refers to the banks and other financial institutions, self-employed traders, large multinational companies involved, through intermediaries or telecommunications systems linked to a variety of currencies for the sale of the object market. It can be tangible - such as foreign exchange exchanges, it can be invisible - such as through the telecommunications system transactions of inter-bank foreign exchange transactions. According to the latest statistics of the Bank for International Settlements, the average daily trading volume of the international foreign exchange market is about $ 1.5 trillion.
At present, there are about 30 major foreign exchange markets in the world, all over the different continents of different countries and regions. According to the traditional geographical division, can be divided into Asia, Europe, North America and other three parts, of which the most important are Europe, London, Frankfurt, Zurich and Paris, the Americas New York and Los Angeles, Sydney, Australia, Tokyo, Singapore and Hong Kong.
Each market has its fixed and unique features, but all markets are common. The markets are separated by distance and time, and they are sensitive to each other and are independent. After a center is opened every day, the order is passed to another center, sometimes for the next market opened the tone. These foreign exchange markets are centered around their cities and radiate around other countries and regions. As the time zone is different, the foreign exchange market in the business hours of the opening, followed by listing business, they are through each other through advanced communications equipment and computer networks into one, the market participants can trade around the world , Foreign exchange funds flow smoothly, the exchange rate between the market is very small, the formation of a global operation, all-weather operation of a unified international foreign exchange market. The simple situation can be seen in the following table:
Region City Time to Market (GMT) Closing Time (GMT)
5, the reasons for the foreign exchange market
The foreign exchange market refers to the place of trading in foreign exchange trading, or the place where the various currencies are exchanged with each other. The reason why the foreign exchange market exists, because:
- Trade and investment
Import and export goods in the import of goods to pay a currency, and in the export of goods to collect another currency. This means that when they settle their accounts, they pay in different currencies. Therefore, they need to own part of the currency received into a currency can be used to buy goods. Similarly, a company that buys foreign assets must pay in the currency of the country, so it needs to convert its currency into the currency of the country.
- speculation
The exchange rate between the two currencies will change as the supply and demand between the two currencies change. The trader buys a currency at an exchange rate and throws the currency at another more favorable exchange rate, and he can make a profit. Speculation accounts for the vast majority of foreign exchange market transactions.
- hedge
As a result of fluctuations in the exchange rate between the two related currencies, those companies that own foreign assets (such as factories) may be exposed to risks when they convert these assets into their national currencies. When the value of a foreign asset in foreign currency is constant for a period of time, the profit or loss is generated if the exchange rate changes and the value of the asset is converted in domestic currency. The company can hedge this potential profit and loss by hedging. This is the implementation of a foreign exchange transaction, the transaction results just offset by the exchange rate changes arising from the gains and losses of foreign currency assets.
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