Wednesday, December 12, 2012

Foreign Exchange Market

Posted by Unknown On 6:24 AM No comments
Foreign Exchange Market


        The Foreign Market is a large, growing and liquid financial market that operates 24 hours a day. It is not a market in the traditional sense because there is no central trading location or exchange. Most of the trading is conducted by telephone or through electronic trading networks. The primary market for currencies is the Interbank Market where banks,insurance companies, large corporations and other large financial institutions manage the risks associated with fluctuations in currency rates.

Exchange Rate
       The value of one currency expressed in terms of another. For example, if EUR/USD is 1.3040(today), 1 Euro is worth US$1.3040

Currency Pair
The two currencies that make up an exchange rate, When one is bought, the other is sold, and vice versa.

Base Currency
The first currency in the pair. Also the currency your account is denominated in.

Counter Currency
The second currency in the pair. Also known as the terms currency.

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