PLDWWW: forex

Thu Aug 28 10:49:56 CEST 2008

Author: glen   Date: Thu Aug 28 08:49:56 2008 GMT
Module: PLDWWW   URL: http://www.pld-linux.org/forex?action=diff&rev2=6&rev1=5
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- == Forex ==
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- [http://www.fxcaliber.com Forex ] is an acronym for Foreign Exchange (Foreign Currency Exchange). Also known as International Currency Market.
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- The foreign exchange market (Forex or FX) exists wherever one currency is traded with another (as an exchange house). The market largely world's largest, in terms of volume of  turnover, and includes trade between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions . Traders at retail (small speculators) are a small part of this market and can participate directly through companies dedicated to providing services  of [http://www.fxcaliber.com/forex-signals.html Forex ] TRADING or indirectly through brokers or banks and may be targeted by con artists of the currency.
- Contents
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-      * 1 Market size and liquidity
-      * 2 business features
-      * 3  Participants in the market
-      * 4 Companies trading
-      * 5 External Links
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- Market size and liquidity
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- The [http://www.fxcaliber.com Forex market ]  is unique because:
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-      * The volume of transactions
-      * The extreme liquidity of the market
-      * The large number and variety of traders in the market
-      * Its geographical dispersion
-      * The long as it develops - 24 hours a day (excluding weekends).
-      * The variety of factors affecting changes
-      * The volume that is traded internationally in foreign currencies, with a daily average of U.S. $ 1.9 trillion in April 2004 according to the survey's 2004 triennial Bank for International Settlements
-      * U.S. $ 1,300 billion in derivatives, ie.: (U.S. $ 200 billion absolute U.S. $ 1,000 billion in foreign exchange and U.S. $ 100 billion in options FX)
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- The currency futures contracts were introduced in 1972 at the Chicago Mercantile Exchange or the Chicago Stock Exchange and is one of the contracts that are traded more actively. The volume of future [http://www.fxcaliber.com Forex  trading ]  has grown rapidly in recent years, but says only about 7% of the total volume of foreign exchange market, as Wall Street Journal Europe (5/5/06, P. 20). The ten most active traders account for nearly 73% of the volume that is negotiated, according to the Wall Street Journal Europe, (2/9/06 P. 20).
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- These large international banks provide the market with purchase prices (bid) and sell (ask). The spread is the difference between these rates. They are generally spread in the currencies traded is only 1-3 pips or points. For example, the bid / ask at a price of EUR / USD could be 1.2200/1.2203. The minimum size is generally negotiates is U.S. $ 1,000,000. To earn money in this market is starting base $ 100.
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- Characteristics of business
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- The [http://www.fxcaliber.com Forex ] market is not a centralized market. This implies that as such there is no single place in the globe that the  currencies are traded: it is depends on the different actors involved in the market.
- The 6 currencies higher transaction currency held ISO 4217 Code Symbol
- 1 Euro EUR €
- 2 Dollar $
- 3 Japanese Yen JPY JPY
- 4 Pound sterling GBP £
- 5-6 Swiss Franc CHF --
- Australian dollar AUD $ 5-6
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- The main centres are negotiating the London Stock Exchange, New York Stock Exchange and the Tokyo Stock Exchange. This market operates virtually 24 hours a day: first open Asian markets, European markets open later and finally open on North American markets. The market opened on Sunday afternoon (when the U.S. East Coast) and closes on Friday at 4:00 pm Eastern Time. This allows investors have constant access to markets with the benefit of greater liquidity and rapid response capabilities to economic developments and / or politicians who take effect on this market.
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- Fluctuations in exchange rates are generally caused by real money flows as well as by expectations of changes in monetary flows generated by changes in economic variables such as GDP growth, inflation, interest rates and budget deficits or trade surpluses, among others.
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- The important news are published, often in dates scheduled, so investors have access to the same news at the same time. However, large banks have an important advantage: they can see the book orders from their customers.
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- In the currency market, the currencies are traded in pairs. Each pair of currencies as well as an individual product and is traditionally listed as XXX / YYY, where YYY is the international code of three letters ISO 4217 in which the price of a unit XXX is expressed. For example, EUR / USD is the price of Euro (EUR) expressed in U.S. dollars (USD) as a 1 euro = 1.3200 U.S. dollars.
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- According to the study of BIS, the most traded currency pairs were:
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-      * EUR / USD - 28%
-      * USD / JPY - 17%
-      * GBP / USD (also called wire) - 14%
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- The U.S. dollar was involved in 89% of trasacciones, followed by the euro (37%), the yen (20%) and sterling (17%).
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- While doing business with the Euro has grown considerably since its inception in January 1999, the Currency Exchange Market is still focused on the U.S. dollar. For example, the Euro currency versus a non-European ZZZ usually involved two pairs: EUR / USD and USD / ZZZ.
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- ===Participants in forex  Market===
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- According to "A study Triennial Central Bank Survey 2004"
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-      * 53% of transactions were exclusively between banks (eg interbank)
-      * 33% involved a dealer (eg a bank) and a charge of fund or other financial institution that was not a bank
-      * 14% were between a dealer and a non-financial company.
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- The interbank[http://www.fxcaliber.com Forex  market] caters much of the sales volume of speculative business. A large bank can negotiate billion dollars a day. Some of this is that negotiates on behalf of clients, but also on his own bank account.
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- Until recently, foreign exchange brokers were actively involved in this business, providing counterparts to negotiate an effective performance of its orders in exchange for a small fee. Today, however, much of this business has been moved to more efficient electronic systems, such as EBS, Reuters, the Chicago Stock Exchange, Bloomberg and TradeBook.
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- ===Companies trading forex===
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- One of the most important participants in the [http://www.fxcaliber.com Forex ]  market are the real sector companies that must buy foreign currency with various types of goods or services. But its impact on the market, at least in the short term, is small.
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- As was mentioned earlier trade flows are an important factor in long-term direction of a coin. Some multinational companies can have an unpredictable impact when their positions, often very large, have been covered because of exposures that are not widely known by other market participants.
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- Central banks play an important role in markets for foreign currency. Its main objective is to control the money supply, inflation, and / or interest rates and often impose exchange rates. Similarly often use their international reserves to stabilize the market.
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- The expectation or the rumor of an intervention by a central bank may be sufficient to stabilize a currency. However, central banks do not always achieve their goals. The market can easily overwhelm any central bank. This happened in the 1992-93 debacle of the Exchange Rate Mechanism, and in more recent times in South-East Asia.
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