Foreign Exchange Rate-what is Foreign Exchange Rate?
Foreign exchange rate (Foreign Exchange Rate) is converted into a country's currency to another countryMoneyThe ratio of parity orPrice. It can be said, are expressed in domestic currency to foreign currency "price." Foreign Exchange Trading generally concentrated in commercial banksFinancial Institutions. Of their foreign exchange trading is aimed at the pursuit of profit, is cheap buying expensive goods to sell, bid-ask spread earn their buying foreign exchange when the exchange rate based onBuying rate, Also known as purchase price; sell foreign exchange when the exchange rate based on knownSelling rate, Also known as selling price. In direct price law, the buying rate for banks to buy one unit of foreign currency to pay for the number of selling exchange rate isBanksSell a unit of foreign currency received by the number of the local currency.Middle rateIs the buying rate and selling rate of the central parity, that is buying rate selling rate 10 1 / 2 = intermediate exchange rate applicable to the sale of foreign exchange among banks, which means that they do not earn foreign exchange transactions between theProfit.
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Foreign exchange rates - related knowledge
1, analysis There are several ways the exchange rate?
MoneyAnalysis of the exchange rate, there are two main methods: basic analysis and technical analysis. Basic analysis is the basic factors affecting exchange rate analysis, the basic factors include the level of national economic development and status in the world, regional and national political situation, the market anticipated. Technical analysis is the use ofPsychology,StatisticsDisciplines, such as research methods and means, through the study of past exchange rates, predict the future exchange rate movements. Analysis of the exchange rate-based
2, in today's world to study the classical theory of exchange rate changes what?
There are three:United KingdomScholarsXun GeTheSaid the international lending,SwedenEconomistKasselThePurchasing power parity, Well-known British economist,CairnsTheInterest Rate Parity. Among them, the interest rate parity and purchasing power parity, said the greatest impact on the market.
3, learn to explain what interest rate parity?
Answer: by the British economist John Maynard Keynes in the1923Interest rate parity theory put forward to explain the level of interest rates and exchange rate relationships. In short, what kind of currency with high interest rates investors are willing to buy what kind of money, and thus will lead to the currency exchange rate. Interest rate parity theory breaks through the traditional balance of payments and the scope of price levels, from the perspective of capital flows changes in exchange rates, laying the foundation of modern exchange rate theories.
4, What is purchasing power parity theory?
A: The purchasing power parity theory of exchange rates in the West as a doctrine. Relative price of two currencies, the domestic purchasing power of money depends on the contrast between the two countries relations. If, a hamburger sold in the United Kingdom worth aBritish Pound SterlingSameHamburg1.70 U.S. dollars sold in the United States. We say that an exchange rate of £ 1 for 1.70 U.S. dollars.
Although the purchasing power parity theory is not perfect, but the central bank in the calculation of basic ratio between currency still plays an important role. Because according to the basis of purchasing power out between exchange rates and price comparison can be judged on the basis of current market exchange rate deviations from the minimum that is an important means to predict long-term exchange rate.
5, decided to move toward the root causes of foreign exchange rates, what is?
A: The foreign exchange rate fluctuations, although the ever-changing, and, like other commodities. In the final analysis is determined by supply and demand. In the international foreign exchange market, when a particular currency when more buyers than sellers, buyers rush to purchase, the buyer power is greater than the seller forces; seller valuable commodity, the price is bound to rise. On the contrary, when the sellers see to poor sales, competing to sell a currency, market forces prevailed sellers, then the dollar must fall.
6, the mass psychology of the expected impact on the foreign exchange market?
A: Like other commodities, a country's currency is often expected for people affected by the rise and fall of foreign exchange rates. Such human factors influence on the exchange rate, sometimes even more than economic factors and the impact was also evident. Therefore, economists, financial experts, analysts, traders and investors often rely on the international community on a daily basis what happened, to make their own comments and forecasts, to express their views on the exchange rate movements.
7, political factors do influence the foreign exchange market?
A: Yes.PoliticalFactorsEconomicFactors are inextricably linked. A country's political situation is stable, its economy, particularly in the currency exchange rate will have a significant impact. Whether it is military conflict, or political scandal, will be important in the foreign exchange market, leaving traces.
8, the central bank to intervene in the foreign exchange market?
A: Because a country's currency exchange rate tends to the country's international trade, economic growth, monetary supply and demand conditions, and even political stability have a significant impact, so when the foreign exchange market speculation that makes the country's exchange rate deviation from the normal level of , the country's central bank intervened often. The central bank in the foreign exchange market to deal with speculators in the four magic is:
1) directly in the foreign exchange market, trading in local currency or U.S. dollars or other currencies2) increase the interest rates in national currency3) to tighten the local currency credit and prevent outflow of domestic currency4) released a statement. National central banks through the above measures, making speculators on the foreign exchange market, a substantial increase in financing costs, forcing them to stop open positions, playing with toys, so that the exchange rate back to a reasonable level.
The above four methods, especiallyCentralThe short-term effectiveness of intervention in the foreign exchange market is most obvious, is often the reason for the exchange rate volatility. Personal foreign exchange trading firm offer customers must be very sensitive to this.
