Forex Market !!
Saturday, 26 July 2008
Forex or foreign exchange market is the largest of all financial markets that exist in the world today. A large number of multinational corporations, banks, central banks, currency speculators and other financial markets are involved in the sale of international currencies. These participants may not be directly involved in the sale of foreign exchange. They can participate in that trade through brokers or banks operating in this wing of international trade.
Compared to other market players, forex market has some unique features. It includes its extreme liquidity, size, geographical dispersion, trading hours long and variety of factors affecting the exchange rate of currencies involved in the trade.
This international currency trading platform is used by institutions such as companies, fund managers and banks to buy and sell international currencies. The capital flows arising from dealing in goods and services and cross-border investment are the main motivating factors behind international currency trade. The sums involved in this trade is normally very large and mostly deals with a single currency market will come from 3 million to 10 million U.S. dollars.
There will be three types of market participants change; customers, banks and brokers. Commercial banks are the most active on the FOREX market. A large trade bank May million per day on behalf of its clients. They are also involved in speculative trading large quantities every day by dominating the market. Until recently, a large volume of speculative trading has been treated by brokers who work in this area. With the introduction of currency swap, a large part of the company moved to these devices working twenty-four hours a day without interruption.
International companies which require foreign currency to make payments for their transactions constitute an important part of this market. They normally deal with small amounts of money compared with bids of banks and other speculators.
The national central banks also play a crucial role in this market for the currency. They often try to use foreign exchange reserves in their countries to stabilize the money market. The mere rumor of intervention by a central bank could be enough to stabilize the currency.
The management of investment firms that handle large accounts such as pension funds and endowments on behalf of their clients are also appealing to foreign exchange market to facilitate their operations in foreign securities.
Labels: forex
posted by Master @ 02:57,