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Foreign exchange market

Radka Hlavnová. Foreign exchange market. (FX Market, Forex Market, Currency market) Is a form of exchange for the global trading of international currencies

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Foreign exchange market

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  1. Radka Hlavnová Foreignexchange market

  2. (FX Market, Forex Market,Currency market) Is a form of exchange for the global trading of international currencies An exchangemarketis a highly organized market where (especially) tradable securities, commodities, foreign exchange, futures, and options contracts are sold and bought. The market in which participants are able to buy, sell, exchange and speculate on currencies. Foreign Exchange Market

  3. Marketparticipants: Foreign exchange markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, and retail forex brokers and investors. Firms: exporters and importers Banks: shortposition, longposition Governments/monetaryauthorities: Marketinterventions

  4. Non-bankingentitities: businesstransactions and hedging Banks: foreignexchangedealers Arbitrageurs: profit seekingfromvariations in ratesindifferentmarkets Speculators: profit seekingfrommovements in exchangerates Classificationofparticipants

  5. Exchanges can be subdivided: by objects sold: • stock exchange or securities exchange • commodities exchange • foreign exchange market by type of trade: • Spot market (immediatedelivery, ratesatthetimeoftransaction) • Forwardmarket (Contractforfuturedelivery) • DerivativesMarkets: Futures and Options

  6. American investor need to firstlyexchange USD for EUR  Thereturnoftheinvestmentdepends: • Notonly on theperformanceofthestocks • Also on thedevelopmentonthe FX Market (HEDGING) (In order to make a responsibledecisionalotof new informationmustbecollected and analyzed) -differenttechniquesofforeignexchangetrading - Importantissueof risk and liquiditymanagement

  7. FX market had existedlongbeforeinternationalporfolioinvestmentsbecameaswidespreadastoday The forex market is considered to be the largest financial market in the world. It is important to realize that the foreign exchange market is not a single exchange, but is constructed of a global network of computers that connects participants from all parts of the world. The average daily turnover in the global foreign exchange and related markets is continuously growing

  8. FX marketisrelated to export/import activities (CzechRepublic- EUR/CZK exchange rate, tourism,foreigndirectinvestmentsetc) Paymentsofservices, foreigndirectinvestments, porfolioinvestments, exchange rate speculationsetc.

  9. New York London Tokyo HongKong Singapore THE MAIN TRADING CENTRES

  10. ^ Source: Euromoney FX survey FX survey 2012: The Euromoney FX survey is the largest global poll of foreign exchange service providers.'

  11. WitzanyJ.,InternationalFinancialMarkets, VŠE., 2010 http://www.investopedia.com/terms/forex/f/foreign-exchange-markets.asp#axzz28hv9q4nL Sources:

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