The foreign exchange market exists wherever one currency is traded for another. This is an international exchange market where simultaneous buying of one currency and selling of other makes. The currencies are traded in pairs, for example Euro dollars / U.S. (EUR / USD) or U.S. Dollar / Japanese Yen (USD / JPY). The market is largely the world's largest in terms of cash value traded, and includes trading between large banks, central banks, multinational corporations, governments and other financial markets and institutions. The Forex market is unique because of its volume of transactions, extreme liquidity of the market (ie price stability even faster with the purchase or sale), the large number and variety of traders in the market, geographic dispersion its long trading hours (24 hours a day – except weekends) and the variety of factors that affect exchange rates. The minimum trade size in this market is generally $ 1 million, with a total trading volume of nearly $ 1.9 trillion per day worldwide. The purchase and sale of currencies are basically two reasons. The nearly 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies in domestic currency. The other 95% is mostly for profit. In fact, this market has the potential to earn nearly $ 100,000 with an initial capital of only $ 500! The ten most active traders account for almost 73% of turnover. They are Deutsche Bank (17%), UBS (12.5%), Citigroup (7.5%), HSBC (6.4%), Barclays (5.9%), Merrill Lynch (5.7%), pursuing JP Morgan (5.3%), Goldman Sachs (4.4%), ABN AMRO (4.2%), Morgan Stanley (3.9%). These large international banks provide the market made a bid (buy) continuously and ask prices (for sale). The bid / asked spread is the difference between the price at which a bank or market maker will sell ( "ask", or "offer") and the price at which a company buys stock exchange operator ( " bid ") from a wholesale customer. This extension is minimal for actively traded pairs of currencies, usually only 1-3 pips. A pipe is the smallest movement of the price used in the trade and currency concerns 1/10.000 of bid / asks for the extension. For example, the bid / quotation does EUR / USD might be 1.2200/1.2203 (ie difference of 3 pips). While the banks get the least and most stable made a bid / asked spread will never offer the same rates to its customers, as their dominant purpose of participating in this market for profit. The currencies are traded against one another. Each pair of currencies thus constitutes an individual product and is XXX / YYY traditionally known, where YYY is the international code of three-letter currency in which the price of a currency unit of XXX is expressed. For example, EUR / USD is the price of the euro expressed in U.S. dollar, as in 1 euro = 1.2045 U.S. dollars. According to the April 2004 'A study of s (international bank for the establishment), the products most heavily traded were: EUR / USD (28%), USD / JPY (17%) GBP / USD (14 %). The currency of E.E.U.U. was involved in 89% of transactions, followed by the euro (37%), Yen (20%) and sterling (17%) – (Note that volume percentages should add up to 200% – 100% for all sellers, and 100% for all buyers). Although trade within the euro has grown considerably since the currency 's creation in January 1999, the foreign exchange market is still dollar-so much. For example, the trade of the euro against a non-European currency ZZZ usually involve two trades: EUR / USD and USD / ZZZ. The only exception to this is EUR / JPY, which is negotiated by a set of currencies in the interbank market. According to the BIS study, the 53% of transactions were strictly inter-dealer (ie interbank), 33% involved a dealer (ie a bank) and an investment fund manager or some other financial institution non-bank, and only 14% were between a dealer and not a financial company. The interbank market caters most of the volume of commercial sales and large amounts of speculative trading day. A large bank may trade billions of dollars a day. Some of this trading is undertaken on behalf of clients, but much is conducted by proprietary desks, trading for the bank 's own account. On the one hand, the retail corridor of the currency handling a fraction of the total depth of the FX market, estimated at $ 25-50 billion a day, which is about 2% of the entire market. Retail industry in the currency market manufacturers often work with two separate trading desks that actually used to a currency business (essentially serving as a desktop or business owner, no treatment-desk ") and one that set for the express purpose of off-exchange trading with retail customers (called the "treatment of the desk" or "desk" commercial). The desktop works as a treatment of the exchange of the counter currency in a bank. The interbank exchange rates, those who come into the interbank system and displayed on the desktop of non-treatment, adjusted to incorporate the extensions that preserve the bank 's (in this case the market maker' s benefit) prior to displayed in the hallway (on the desktop of treatment) andalusia andalusia retail customer. The treatment of the valuation of the desktop is therefore not a direct reflection of the exchange of currency valuation, but artificial created and controlled by the lead runner. Brokers tend to provide the best currency exchange rates compared to banks that traded in the currency market as well as companies such as Western Union or MoneyGram to continue the competition against them. Therefore the companies addressing the Brokering of an international currency specialist is a convenient way of transferring money overseas at both large and small quantities.
Ali Jamalan