Foreign Exchange Rate

The basic definitions

In direct quotation, buying rate is the number of bank bought the currency to pay for a unit of foreign currency, the exchange rate is the Bank sold foreign exchange to sell a unit charged this number of coins. Middle exchange rate is buying and selling rate of the central parity exchange rate, that (buying rate ten selling rate) 1/2 = middle exchange rate for the sale of foreign exchange between banks, meaning that between them do not earn foreign exchange trading profit.

Currency Overview

Forex concept has a dual meaning, that is dynamic and static points. Dynamic concept of foreign exchange, refers to a country's currency convertible into another country's currency, in order to settle a specialized business activities of the claims and debts of international relations. It is the international exchange (ForeignExchange) for short. Static concept of foreign exchange, means of payments that can be used between international settlement in foreign currency. This means of payment, including credit instruments and securities denominated in foreign currencies, such as: bank deposits, commercial bills, bank drafts, bank checks, foreign government treasury bills and short and long term securities. IMF explained as: "Forex is the currency administration (central banks, monetary authorities, Exchange Stabilization Fund and the Ministry of Finance) to maintain in the form of bank deposits, the Ministry of Finance treasury bills, government bonds and other short and long term, in international when the balance of payments deficit can use the debt. " Accordance with the "Foreign Exchange Management Regulations" China in January 1997 issued revised regulations: Forex, refers to the following can be used as denominated in foreign currency for international settlement payments and assets:

⑴ foreign currency, including notes, Mint;

⑵ payable in foreign currency, including bills, bank certificates of deposit, corporate bonds and stocks; ⑶ foreign currency securities, including government bonds, corporate bonds, stocks and so on;

⑷ Special Drawing Rights, the European Currency unit (euro);

⑸ other foreign currency assets.

commonly referred to as foreign exchange, usually in terms of its static sense. That is, foreign currency or means of payment to foreign currency can be used for international settlement. Exchange rate, also known as the exchange rate, the price refers to a country's currency expressed in another country's currency, or is parity between the two currencies. In the foreign exchange market, the exchange rate is a five-digit number is displayed, such as: euro EUR0.9705, yen JPY119.95, sterling GBP1.5237, Swiss franc CHF1.5003, the smallest unit of exchange rate changes to the point that the last a change-digit numbers, such as: euro EUR0.0001, yen JPY0.01, sterling GBP0.0001, Swiss franc CHF0.0001 accordance with international practice, usually three letters to indicate the name of the currency, more than Chinese name after the English shall be the currency of the English code.

The exchange rate is also known as "forex market price or the exchange rate." A country's currency exchange rate to another country's currency, the price of another currency is a currency. Because different names in the world of national currencies, currency differ, so a country's currency against currencies of other countries to set a exchange rate, that is the exchange rate.

The exchange rate is the most important international trade adjustment lever. Because the goods are produced in one country by the country's currency to calculate the cost, to get the competition on the international market, its cost of goods will be associated with the exchange rate. The level of the exchange rate will directly affect the cost of goods and prices on the international market, a direct impact on the international competitiveness of goods.

For example, a value of 100 yuan of goods, if the dollar against the RMB exchange rate is 8.25, the price of this commodity in the international market would be $ 12.12. If the dollar exchange rate rose to 8.50, which means that the dollar devaluation of the renminbi, the commodity prices in the international market would be $ 11.76. Lower commodity prices, increased competitiveness, and certainly easy to sell, thereby stimulating export of the goods. Conversely, if the dollar fell 8.00, which means that depreciation of the dollar, the RMB appreciation, the commodity prices in the international market is $ 12.50. Certainly not sell high-priced goods, it will hurt exports of the commodity. Similarly, while the dollar devaluation will restrict imports of goods to China, which in turn depreciation of the dollar and the appreciation of the yuan but it will greatly stimulate imports. That is why, the RMB appreciation will greatly increase the cost of Chinese exports in the international market, the competitiveness of Chinese goods hit, and in turn, stimulate China to import large quantities of their merchandise. So when the Asian financial crisis, the Chinese insist on not devaluing the yuan is a significant contribution to the international community. If devaluation, other countries, the financial crisis will be worse.

It is because of exchange rate fluctuations in import and export trade will bring such a large range of fluctuation, many countries and regions have implemented a relatively stable currency exchange rate policy. Import and export of mainland Chinese high-speed steady growth, thanks to a stable exchange rate policy to a large extent.

Getting started learning foreign exchange rates

novice can learn to understand a few suggestions:

1 when the transaction is to set a good stop to control the position, which is very. important. Exchange rate generally five digits, the last digit 1 change, changes in the minimum exchange rate, known as 1:00

2. To choose a mainstream platform (subject to the FSA or NFA regulation, stating that they operation and cash flow are whether norms and carefully to protect our security. UK FSA most regulated.

basics is necessary. For example the English name of the gold currency (XAUUSD) uS dollar (USD) euro (EUR) Japanese yen (JPY) British pound (GBP) Australian dollar (AUD) Canadian dollar (CAD) New Zealand dollar (NZD) Swiss Franc (CHF), look at the recommendations, "ABC foreign exchange rates Getting Started", "foreign exchange market", "foreign exchange rates Japanese candlesticks curve "" ultra short-term master "" foreign exchange speculation AZ "to see more books for our understanding of learning foreign exchange rates helps a lot

3 maintain a good attitude is normal profitability (Note: you I also need to know some basic knowledge of foreign exchange.) basic information and free e-book download FXCM global Jinhui area inside the e-book download the book free e-books and other foreign exchange technologies

4. basics What is including trading hours, what is the English name of the currency, what is the opening closing time. By the way, if you are a novice can FXCM Global Goodwill to register for free forex demo account to register a play look analog foreign exchange speculation is so fried slowly you will understand.

after learning portal ready to work. we need to know the timetable for foreign exchange gold trading.

at present foreign exchange speculation on the market a lot of tutorials and methods some focus on the fundamentals, while others focus on the technical side, but in terms of news or technical point of view, has its limitations, first of all: the impact of the weaker aspects of the news, only partially affect the exchange rate volatility, but daily shocks and more dependent on the trend of global investors predict; the technical side is more complicated, but the foreign exchange market is essentially a chaotic state, there is no 100% of the natural law at all, if the technology is mistakenly believed blindly judgment could lead to complete failure; the current relatively high-end market trading was spontaneous targeted to create trading systems: that is, to create a set of their own personal style of foreign exchange trading system, the system comprehensive set of rules, taking into account all the capital investment ratio and risk control mechanism, rather than just a skill, using the foreign exchange trading system, ordinary people can also do foreign exchange earned pours, and trading system proven to do best current foreign exchange is rich Manou wealth management platform, was named "best Foreign exchange trading system"

time foreign exchange rates

major international foreign exchange market opened closing time (the time has translated into Beijing, Note continents period of time will have a significant impact on the exchange rate):

Wellington, New Zealand foreign exchange market: 04: 00-12: 00

Australian foreign exchange market: 6: 00- 14:00

Japan tokyo Foreign Exchange market: 08: 00-1 4:30

Singapore Foreign Exchange Market: 09: 00-16: 00

London foreign exchange market: 15: 30-00: 30

foreign exchange in Frankfurt, Germany market: 15: 30-00: 30

New York foreign exchange market: 21: 00-04: 00,

exchange knowledge

in the foreign exchange market, It is represented by three letters of the name of the currency. foreign exchange rate generally common English dollar (USD) euro (EUR) Japanese yen (JPY) British pound (GBP), a standard lot is 100,000 units of the international foreign exchange currency basis, these are is a must-see monetary Know About FXCM Jinhui network, especially in some less common currency such as English NZD NZD / AUD AUD / JPY yen

international spot gold smallest unit of change - point (PIP) , the exchange rate generally five digits, the last digit 1 change, changes in the minimum exchange rate, called the 1:00 a standard lot is 100 ounces of gold

After understanding the basic knowledge and time when we need to focus on the lower exchange rate system

exchange rate regime

concept

What is Forex? If a narrow sense, the foreign exchange refers to the original foreign currency, broadly speaking, usually It refers to the means of payment for international Settlements in foreign currency. The exchange rate is also known as "forex market price or the exchange rate." A country's currency exchange rate to another country's currency, the price of another currency is a currency. Because different names in the world of national currencies, currency differ, so a country's currency against currencies of other countries to set a exchange rate, ie the exchange rate. There are the nominal exchange rate, the nominal effective exchange rate of the points so-called exchange rate refers to the daily in the foreign exchange market foreign currency price used in the transaction, namely Exchange.

Effective Exchange Rate

The so-called effective exchange rate refers to the weighted average price determined by the trade weighted foreign currency. IMF estimated that members of the organization when the effective exchange rate, the general choice of the country's top 20 trading partners, according to the proportion of each trading partner share in the total import and export trade in determining the trade weighted nominal effective exchange rate of the national currency which is equal to 20 national currency weighted average of their required nominal foreign currency exchange rates. The nominal effective exchange rate excluding the price rise due to the country that year, get real effective exchange rate. Since the real effective exchange rate takes into account not only changes in major trading partners of the country's currency, and excluding inflation factors, compared with the simple use of the nominal exchange rate, to more fully reflect the external value of a currency. If a country's real effective exchange rate rise, meaning that the country's foreign currency depreciate more than the average amplitude of the main trading partners of foreign currency devaluation, the international competitiveness of the country's products is relatively improved, in favor of exports against imports, trading income branched prone surplus, whereas the opposite.

exchange rate system, also known as exchange rate arrangements (ExchangeRateArrangement): is widely used to determine the national currency and other currencies system. States or the international community is determined to maintain the principle of exchange rate adjustment and management, methods, ways and institutions made the system requirements. Exchange rate regime decided that all States have a significant impact on the exchange rate. Review and understand the exchange rate system, allows us to gain a deeper understanding of the fluctuations in the international financial market exchange rate. According to the size of the fluctuation range of the exchange rate, exchange rate system can be divided into a fixed exchange rate and floating exchange rate system.

fixed exchange rate (fixedexchangeratesystem) refers to the legal standard currency or gold itself as a reference for determining the rate, a stable currency exchange rate system. They have different fixed exchange rate system under different monetary system.

floating exchange rate system (floatingexchangeratesystem) refers to a country does not specify the boundaries of fluctuations in the gold parity and the exchange rate of local currency and foreign currency, monetary authorities have no obligation to maintain the exchange rate fluctuation limits, the exchange rate with the foreign exchange market supply and demand changes in the relationship between a free-floating exchange rate system down. The system has long existed in history, but it is really popular after 1972 dollar-centered system of fixed exchange rates collapsed.

content

a. The principles and basis to determine the exchange rate. For example, the value of money itself as the basis, or value-based and other legal representatives.

b. Maintaining exchange rate adjustment approach. For example, it is the use of open legal way appreciation or depreciation, or to take any measures it floating or limited official intervention. c. Act, institutional and policy management of exchange rates. States such as exchange control provisions relating to exchange rates and scope of application.

d. Develop, maintain, and manage the exchange rate mechanism, such as the Administration of Foreign Exchange, the Exchange Stabilization Fund Commission.

main form and features

In the international financial history, there have been a total of three types of rates system, namely the fixed exchange rate system under the gold standard, fixed exchange rate and under the Bretton Woods system floating exchange rate system.

⑴ fixed exchange rate regime

Under the gold standard 1880--1914 years, 35 years, major Western countries accepted gold standard that countries use gold coins with a certain fineness and weight in circulation as money, gold coins can freely cast, freely convertible and freely input and output. Under the gold standard, currency exchange rate between the two countries by their respective ratio of gold - to decide the gold parity (GoldParity), for example, a pound of gold is 113.0015 Green, a dollar and gold is 23.22 Greene, then:

1 GBP = 113.0015 / 23.22 = US $ 4.8665

As long as the gold content of the same two currencies, two currencies exchange rate remains stable. Of course, this fixed exchange rate also affected the foreign exchange supply and demand, the balance of payments, exchange rate fluctuations but only gold points (GoldPoint). Gold delivery point is caused by exchange rate fluctuations from one country to limit gold output or input. Maximum limit exchange rate volatility is mint parity plus the cost of transportation of gold, that gold output point (GoldExportPoint); the lowest limit exchange rate volatility is mint parity reduce the cost of transport of gold, that gold input point (GoldImportPoint).

occurs when a country's balance of payments deficit, foreign exchange rates rose more than gold output point will cause outflow of gold, reducing money in circulation, deflation, falling prices, thereby enhancing the competitiveness of commodities in the international market . Increase output and reduce input, leading to restore the balance of payments; the other hand, occurs when the international balance of payments surplus, foreign exchange rate fell below the gold point input, will cause the inflow of gold, an increase of money in circulation, rising prices, reduce output and increase input , leading to the country