Forex
Foreign exchange transactions encompass everything
conversion of currencies by a traveler at an airport to billion-dollar
payments made by corporate giants and governments for goods and
services purchased overseas. Increasing globalization has led to a
massive increase in the number of foreign exchange transactions in
recent decades. The global foreign exchange market is by far the
largest financial market, with average daily volumes in the trillions of dollars.
Forex (FX) is the market in which currencies are traded. The forex
market is the largest, most liquid market in the world with an average
traded value that exceeds $1.9 trillion per day and includes all of the
currencies in the world.
There is no central marketplace for currency exchange; trade is
conducted over the counter. The forex market is open 24 hours a day,
and currencies are traded worldwide among the major financial
centers of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong,
Singapore, Paris and Sydney.
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Curreny Rate
Currency rate is the rate at which one currency can be exchanged for another. In other words, it is the value of another country's currency compared to that of your own.. Theoretically, identical assets should sell at the same price in different countries, because the exchange rate must maintain the inherent value of one currency against the other.
Fixed Currency Rates
There are two ways the price of a currency can be determined against another. A fixed rate is a rate the government (central bank) sets and maintains as the official exchange rate. A set price will be determined against a major world In order to maintain the local exchange rate, the central bank buys and sells its own currency on the foreign exchange market in return for the currency to which it is
Floating Currency Rates
Unlike the fixed rate, a floating exchange rate is determined by the private market through supply and demand. A floating rate is often termed "self-correcting," as any differences in supply and demand will automatically be corrected in the market
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