1. What is foreign exchange?
Foreign exchange refers to the foreign currency held by a country and the means of payment for international settlement expressed in foreign currency.
The concept of foreign exchange can be divided into static and dynamic.
1, static concept
The static concept of foreign exchange refers to the means of payment expressed in foreign currency that can be used for international settlement. This means of payment includes credit instruments and securities expressed in foreign currency, such as bank deposits, commercial bills, bank drafts, bank checks, long-term and short-term government securities, etc.
2. Dynamic concept:
The dynamic concept of foreign exchange refers to a specialized business activity that one country's currency pair is converted into another country's currency to pay off international creditor's rights and debts. It is short for international exchange.
What needs to be pointed out here is that the currencies of some countries are not freely convertible in the international market, so they can only be counted as foreign currencies, not as foreign exchange.
Second, what is the exchange rate?
Exchange rate, also known as exchange rate, refers to the price expressed by one country's currency in another country's currency, or the price comparison between two currencies. It is usually expressed by the conversion rate between two currencies. For example, USD /CNY= 1/7.2456, that is, the exchange rate between USD and RMB is 1: 7.2456, or USD 1 needs to be purchased with RMB 7.2456.
Third, several characteristics of exchange rate.
1, five digits display.
0.9705 euro
Yen 1 19.95
65438 +0.5237
Swiss franc 1.5003
2. The minimum change unit is a point, that is, the change unit of the last digit.
Euro 0.000 1
Yen 0.0 1
0.00065438
Swiss franc 0.000 1
3. ups and downs are described by "points"
According to market practice, the price of foreign exchange rate usually consists of five significant figures, counting from right to left, the first one is called "X point", which is the smallest unit of exchange rate change; The second name is "X ten", and so on.
For example: 1 Euro =1.101USD; 1 USD = 120.55 yen
The euro changed from 1. 10 10 to1.10/5, indicating that the euro rose 5 points against the dollar.
USD/JPY changed from 120.50 to 120.00, which means USD/JPY fell by 50 points.
Fourth, the pricing method of exchange rate.
1. Direct quotation
Direct quotation is a way to express a unit's foreign currency exchange rate in domestic currency. Generally speaking, foreign currency of 1 unit or 100 unit can be converted into local currency. At present, most countries in the world adopt direct quotation, and China also adopts direct quotation. For example, the dollar against RMB is 1:6.4906.
2. Indirect pricing method
Indirect pricing method is a method of expressing the exchange rate of a certain unit of domestic currency in foreign currency. Generally speaking, how many foreign currencies can be exchanged for the local currency of 1 unit or 100 unit? At present, only a few countries in the world adopt indirect pricing methods, such as pound, euro, Australian dollar, New Zealand dollar and Irish pound. For example, for Britain, the exchange rate of British pound against RMB is 1: 9.445438+0, which is the indirect pricing method.
5. What are the main products and symbols?
According to international practice, three English letters are usually used to indicate the name or code of currency.
Dollar: USD
Pound: Pound
Euro: Euro
Japanese yen: Japanese yen
Canadian dollar: Canadian dollar
Swiss franc: Swiss franc
Australian dollar: Australian dollar
New Zealand dollar: New Zealand dollar
6. Who are the market participants?
Participants in the foreign exchange market mainly include central banks, commercial banks, non-bank financial institutions, brokerage companies, self-dealers and large multinational enterprises. They trade frequently and the transaction amount is huge, each transaction is in the millions of dollars, even exceeding10 million dollars. Generally speaking, there are three motives for their participation:
1) international enterprises convert profits gained abroad into domestic currency through trade and investment.
2) Hedging, corporate finance ministers and fund managers will also use the foreign exchange market to reduce the risk of price fluctuations in futures trading.
3) Speculation for profit.
7. What are the major foreign exchange markets in the world?
At present, there are about 30 major foreign exchange markets in the world, which are distributed in different countries and regions on all continents. Among them, the most important ones are London, Frankfurt, Zurich and Paris in Europe, new york and Los Angeles in America, Sydney in Australia, Tokyo, Singapore and Hong Kong in Asia.
Eight, the main foreign exchange market trading hours
The foreign exchange market trades 24 hours a day. The world foreign exchange market alternates with each other in business hours, forming a circular operation pattern.
9. What are the ways to buy foreign exchange?
1, bank. At present, many banks can handle non-speculative foreign exchange situations such as personal settlement and sale of foreign exchange, settlement of foreign exchange by trading companies, and purchase of foreign exchange for personal overseas travel expenses, or they can choose to purchase foreign exchange from banks.
2. Platform traders. At present, China has allowed individuals or institutions to exchange foreign exchange online, and individuals or institutions can buy and sell foreign exchange through platform traders.