Unlike the stock market, the forex market (foreign exchange) is a relatively new player in the world of investment. Today, the current model of the foreign exchange market began in the early 1970s, and today it is the largest financial market around, even surpassing the stock market. Trading-volume is over U.S. $ 2 trillion U.S. dollars a day, the Forex market is attracting more and more investors all the time. Before an investor starts trading on the Forex market, it includes the criteria of how exchange rates work.
Exchange rate
Basically, the exchange rate is the exchange of two currencies. Most currencies are traded against the dollar or two. The five most common currencies are traded in U.S. dollars (USD), euro (EUR) Yen (JPY), Pound (GBP) and Swiss franc (CHF). Some other currencies that are traded on the Australian dollar, Canadian dollar and the Hong Kong dollar.
When the exchange rate or interest rate, the numerator represents the currency quote currency base and the denominator, which is always one.
Suppose the investor wants to exchange euros into dollars. In this case, the euro is the quote currency, or how much money is exchanged. reference currency is the dollar. Investors consider the exchange rate (dollars in euro) or through online banking, broker, etc., and then said that the amount that the amount of euros in change. Suppose the exchange rate is 1.57959. This means that € 1.57959 will pay a dollar. If a switch 1000 euro, so he can get a $ 1579.59 (1000 x 1.57959).
His side of the coin, the exchange rate can also tell the investor how much he would receive if he recoils from dollars to euros. If it was $ 1,000, it can either distribute the amount of exchange rate euro / dollar even (1000/1.57959 $ = 633 070 000), or find a discussion of dollars for euros of interest on the Internet, etc. ( ie 0.633072), and multiply the number of dollars in change ($ 1,000 x .633072 = 633.07 million).
When the exchange rate is seen, the investor can feel more confident about investing in the Forex market.
Exchange rate
Basically, the exchange rate is the exchange of two currencies. Most currencies are traded against the dollar or two. The five most common currencies are traded in U.S. dollars (USD), euro (EUR) Yen (JPY), Pound (GBP) and Swiss franc (CHF). Some other currencies that are traded on the Australian dollar, Canadian dollar and the Hong Kong dollar.
When the exchange rate or interest rate, the numerator represents the currency quote currency base and the denominator, which is always one.
Suppose the investor wants to exchange euros into dollars. In this case, the euro is the quote currency, or how much money is exchanged. reference currency is the dollar. Investors consider the exchange rate (dollars in euro) or through online banking, broker, etc., and then said that the amount that the amount of euros in change. Suppose the exchange rate is 1.57959. This means that € 1.57959 will pay a dollar. If a switch 1000 euro, so he can get a $ 1579.59 (1000 x 1.57959).
His side of the coin, the exchange rate can also tell the investor how much he would receive if he recoils from dollars to euros. If it was $ 1,000, it can either distribute the amount of exchange rate euro / dollar even (1000/1.57959 $ = 633 070 000), or find a discussion of dollars for euros of interest on the Internet, etc. ( ie 0.633072), and multiply the number of dollars in change ($ 1,000 x .633072 = 633.07 million).
When the exchange rate is seen, the investor can feel more confident about investing in the Forex market.
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