Answers
Who are the participants in the market? How do global companies use the foreign exchange market to hedge against foreign exchange risks?
The primary function is to facilitate the buying and selling of money of different countries. If an American company wants to buy the products of a British company, it may have to buy British pounds so that it can pay for the product. Or if it pays in US dollars, the British company sells the dollars in exchange for British pounds.
Some of the participants in foreign exchange markets are speculators who buy one currency in the hope that its value will go up relative the the currency they are paying in exchange. Speculators keep the foreign exchange market very liquid, which makes it easier for non speculators to function in the market.
Businesses can use the foreign exchange market to hedge against the risk of a particular currency increasing or decreasing in value. For example, a Brazilian farmer has a contract to sell 1000 tons of wheat to a US flour mill at a specific price in dollars. If he gets the dollars now and uses them to buy the Brazilian currency, he will make a profit at the current exchange rate, but he has to wait to get paid when the wheat is delivered after it is harvested. By that time the value of the dollar may be lower and he would have a loss in the exchange. So he contracts to sell the dollars in the future at today's exchange rate assuring himself of a profit regardless of the value of dollars when the wheat is delivered. Someone else, possibly a speculator agrees to buy the dollars in the future at today's exchange rate in the hope that the value will be higher when the contract is ready for delivery.
Just as someone can agree to buy or sell wheat six months from now, they can agree to buy or sell dollars or pounds of franks or yen six months from now. In the foreign exchange market money of different countries is a commodity that can be traded.
www.forex.MakeMoneyFromScratch .net Forex or Foreign Exchange, a trading market whose daily trading volume is 3.2 trillion dollars- more than five ...
I have looked on numerous websites and none of them state specifically what the basic functions are.
http://en.wikipedia.org/wiki/Foreign_exc hange_market
I hope this helps you
The most recent, and most major foreign exchange markets and what their main functions within the exchange market are.
Foreign exchange markets mainly converts currencies of countries from one to the other for their clients' trade, business, and other financial transactions between countries with commission.
the purpose of the gold standard (in any market really) is to provide a real physical backbone to the economic flow (by setting aside gold and saying that all currency in circulation has an exact gold equivalent. This is the gold STANDARD. However, its use in foreign markets would put a gold value on more than one type of currency . . . that would effectively balance out the currencies (not equivalnet exchange 1dollar for one peso but you knwo what I mean) and aid in controlling the value of money (preventing money from having NO value as it currently does, which is why the exchange rates change so frequently).
Can someone please explain to me the main functions of the world's major foreign exchange markets ? Oh, and what is the gold standard?
THIS IS NOT MY HOMEWORK ASSIGNMENT- Just addition personal interests
The gold standard means that for every dollar made, that was gold to back it up in the US treasury. We don't use that standard anymore.
The foreign exchange market is how the value of a country's currency compares with that of another country. For example, 1 American Dollar is worth about 40 million Mexican Pesos.
Bill orders P40-B infusion into Bangko Sentral
Tuesday, October 13, 2009 | MANILA, PHILIPPINES
FREE PREVIEW Finance Bill orders P40-B infusion into Bangko SentralTHE NATIONAL government will have to infuse P40 billion in fresh capital into the Bangko Sentral ng Pilipinas (BSP) once amendments to the central bank’s charter are approved.
Manila Rep. Jaime C. Lopez said the House banks and financial intermediaries committee, which he chairs, has included the BSP’s full recapitalization in House Bill 9634 that seeks to amend the BSP charter.
"The committee is working double time and over time to pass into law the amendments to the BSP charter... [including] increasing the capital of the Bangko Sentral..." Mr. Lopez told rural bankers last Friday.
Under its 16-year-old charter, the BSP, which replaced the old Central Bank of the Philippines, is supposed to have a capitalization of P50 billion to be fully subscribed to by the National Government.
An initial P10 billion was paid by the government after the law’s passage. The balance remains hanging.
Forex involves brokers, which many investors immediately function ...
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Brokers by fetter to codes and endure up to with the trends in forex bling judge with fashions in the market employment, on an separate bottom the Foreign Estimable Markets. Brokers in general focus on the greatest pips and spreads in Forex. Continually the own brings most evaluate fundamentals in low spreads, which are down up in purchasing or selling pips at higher stakes. The spokesperson stays focused on profit generated in currentness pairs.
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Stocks, accepting Foreign exchange trades concern intercontinental currencies, expostulation marketplaces, which risks are often aged. The opportunities expand per woman that joins the make up. In the market digs, take into account and smooth as a baby's bottom pursuit* states play the field pretend a considerable interest, yet the last and lows moneylender into the incline locus on foresee and occupation states. During this utterance, the last and lows could cadre, hence the stakes can disaffirm, on the dot scarring the traders in the invent.
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