Everyone knows that foreign exchange trading is a global transaction, so there are many factors that will affect the foreign exchange market. Foreign exchange speculators not only need to have a detailed understanding of foreign exchange knowledge, but also have a grasp of the foreign exchange market. Today, the author will give you a detailed introduction to the knowledge points of the foreign exchange market.
The foreign exchange market refers to a trading place engaged in foreign exchange trading. Its participants are financial institutions and self-operated traders, and various currencies are used as trading objects, which are divided into tangible transactions and intangible transactions. According to incomplete statistics, there are currently more than 30 foreign exchange markets in the world, covering Asia, Europe, North America and other places. Due to different regions, there will be time differences. The foreign exchange markets in various regions have common features, and they both influence each other and are independent. independent.
Why is there a foreign exchange market? There are three reasons:
1. Speculation
The supply and demand of currency will affect the exchange rate between the two currencies. Investors buy currency at one exchange rate and sell currency at another exchange rate. This process is the process of profit. Speculation occupies an important position in the foreign exchange market;
2. Hedging
Because there are fluctuations in the exchange rate between the relevant currencies, companies with foreign assets convert assets into domestic currency, and there will be some losses, so the company can eliminate this loss in the form of hedging;
3. Trade and investment
Importers and exporters need to pay in one currency when importing goods, and charge another currency when exporting goods, and different currencies for receipt and payment will appear at the time of settlement. In order to obtain income.
What are the characteristics of the foreign exchange market? There are three characteristics of the foreign exchange market, that is, there is a market without a market, cyclical operations, and zero-sum games.
One: There is a market but no market. There are two systems in the financial industry in Western countries. Foreign exchange trading is carried out through the Hongshang network. The biggest feature of the Hongshang network is that there is no unified operating market;
Two: The global financial centers are located in different geographical locations, and there are time differences in Asia, Europe, America, etc., so a 24-hour foreign exchange market has been formed;
Three: In the foreign exchange market, the change of the exchange rate is the exchange ratio of the currencies of the two countries. The change of the exchange rate is the decrease of the value of one currency and the increase of the value of the other currency.
The above are the knowledge points about the foreign exchange market introduced by foreign exchange speculators. I hope it will be helpful to everyone’s foreign exchange transactions.
