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What Is Forex
The foreign exchange market (FX or FOREX) is one of the largest and most liquid financial markets in the world.
A three-year survey by an authoritative central bank found that foreign exchange trading volume exceeded 3.2 trillion dollars on an average daily basis in April 2007.
It turns out that the scale of the foreign exchange market is still expanding.
Among them, the current exchange market accounts for about one -third of the trading volume of the foreign exchange market.
Foreign exchange can be classified into two types: use and other circulating currency for exchange transactions, use gold and crude oil such as spot assets for transactions.
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Know the foreign exchange market
First understand "What is a foreign exchange transaction?"
In fact, it is usually foreign exchange transactions to exchange foreign currency or storage foreign currency.
In the same way, it can be proved that the conversion of different currencies is foreign exchange transactions.
Let's understand "What is a foreign exchange rate?"
Foreign exchange exchange rates will change with the global political and economic incidents or messages in the market. Investors expect the direction of exchange rate changes to buy or sell currency accordingly to earn profit from them.
At present, there are more than 30 major foreign exchange markets in the world, all over different countries, of which are more important in London, New York, Tokyo, and Singapore's foreign exchange trading market.
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Market operation time
Other markets have transaction time limits, but the foreign exchange market does not. It can be operated 24 hours a day, and transactions can be traded at any time.
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Exchange rate mechanism
The two most common mechanisms of foreign exchange are the elastic exchange rate mechanism and the fixed exchange rate mechanism.
The elastic exchange rate mechanism refers to the free floating currency exchange rate, and the floating power is determined by the market.
Exchange rates are fixed through the fixed exchange rate mechanism, which means they cannot fluctuate freely.
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The main factor affecting the exchange rate
In addition to international trade, economic and political factors, interest rates, short-term currency supply and demand affect the market value of free floating currency.
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Overseas Trading (OTC)
An overseas trading market is the foreign exchange market. According to this market, trading and selling take place without an actual trading place, and there are no specified transaction or liquidation times.
With the help of the electronic trading network, the foreign exchange market consists of a global network of banks, enterprises, and individuals that run continuously 24 hours a day.
The official offer screen displays the final purchase and selling price entered into the computer by foreign exchange traders. The foreign reporting price between banks is called inter -bank exchange rate.