It is a trading place for all countries and by far the largest capital market in the world.
It plays an important role in economics and finance.
Market functions For goods markets, foreign exchange markets facilitate trade in goods and services between countries and help businesses and individuals settle foreign exchange.
In terms of capital markets, the foreign exchange market helps individual and institutional investors to hedging and speculation, in which hedging refers to the risk that the investor himself is exposed to (i.e., holding) to hedge himself or herself through foreign exchange market products.
Speculation is when investors do not face foreign exchange risk, but by predicting future exchange rate changes, with the intention of participating in forward and other foreign exchange related contracts in order to obtain profits.
Foreign Exchange Market Participants (I) Sellers Foreign Exchange market sellers need to offer a variety of foreign exchange market products to different customers, usually large multinational banks.
Buyers The foreign exchange market has a wider range of buyers, mainly including the following five types of accounts: (1) Corporate accounts: Companies are usually involved in the cross-border purchase and sale of goods and services.
In addition, international mergers and acquisitions, corporate investment in overseas assets and foreign exchange loans will also bring about cross-border capital flows;
(2) Investment accounts are used by insurance companies, mutual funds, pension funds and other institutional investors for risk hedging or speculation;
(3) Retail accounts are those of individuals and small institutions, usually used for outbound tourism and small cross-border trade speculation;
(4) The government’s foreign exchange demand involves maintaining foreign consulates, purchasing and investing military materials, and foreign currency bonds issued by the government.
Current account surplus countries also invest their international capital in national sovereign funds (368) to realize investment profits;
(5) The central bank influences the domestic exchange rate level and trend through the operation of the foreign exchange market.
International Organizations Nowadays, there are many international organizations around the world,
Including the Fund (), the World Bank and the World trade organization (WTO)149 the InternationalMonetary Fund (InternationalMonetary Fund)
The main tasks of the IMF are to ensure the stability of the international monetary system, exchange rate system and international payment system, and to control country-specific market risks and global system risks.
Its specific functions include :(1) promoting international trade and economic growth, reducing poverty and unemployment;
(2) Actively maintain exchange rate stability and encourage an open and orderly international payment system;
(3) To provide member countries with temporary foreign exchange loans to help them solve short-term trade payment problems.
The World Bank’s main mission is to help developing countries lift themselves out of poverty and build basic infrastructure for economic development.
Its specific functions include :(1) encouraging states to implement effective commercial law and judicial systems;
(2) Protect individual and property rights, pay attention to the spirit of contract and contract system;
(3) Establish a complete financial system, covering all aspects of financial support from small loans to loans to large enterprises;
(4) Fight corruption.
The main task of the WorldTrade Organization (wto) is to maintain the international trade order, mediate trade disputes and promote free trade by establishing global trade rules and regulatory framework.
Its specific functions include :(1) implementation and administration of various agreements;
(2) Provide a negotiation platform;
(3) Actively resolve various trade disputes;
(4) Ensure that member states adopt open and transparent trade policies.
The New Year will be the market holiday, the Fed is about to start trimming.
Please pay attention to the specific operation, the market is changing rapidly, investment needs to be cautious, the operation strategy is for reference only.
