If you invest, you must pay cash. When you open an account with a foreign exchange company, you can make use of the fluctuation of exchange rates in different countries to earn the difference. Generally, there are 100 times leverage and 200 times leverage. The investment threshold is low, which can play the role of small and broad.
Exchange rate, also known as foreign exchange rate, foreign exchange rate or foreign exchange market, refers to the ratio or price of one country's currency to another country's currency or the price of another country's currency expressed in one country's currency. Exchange rate changes have a direct regulatory effect on a country's import and export trade. Under certain conditions, the devaluation of the local currency, that is, lowering the exchange rate, will promote exports and restrict imports; On the other hand, the appreciation of the local currency, that is, the rise of the exchange rate, plays a role in restricting exports and promoting imports.
Function and influence
Import and export
Generally speaking, the reduction of the local currency exchange rate, that is, the depreciation of the foreign ratio of the local currency, can promote exports and curb imports; If the exchange rate of local currency rises, that is, the ratio of local currency to the outside world rises, which is beneficial to imports and unfavorable to exports.
price
From the perspective of imported consumer goods and raw materials, the decline of exchange rate will cause the domestic price of imported goods to rise. As for the impact on the overall price index, it depends on the proportion of imported goods and raw materials in the gross national product. On the other hand, other things being equal, the price of imported goods may fall, and its influence on the overall price index depends on the proportion of imported goods and raw materials in the gross national product.
capital flow
Short-term capital flows are often greatly influenced by exchange rates. When the local currency depreciates, domestic investors and foreign investors are unwilling to hold various financial assets denominated in local currency, and will convert them into foreign exchange, leading to capital outflow. At the same time, due to the continuous exchange of foreign exchange, the demand for foreign exchange is in short supply, which will push the local currency exchange rate further down.
On the other hand, when there is a trend of appreciation of local currency abroad, domestic investors and foreign investors try to hold various financial assets denominated in local currency, which will lead to capital inflows. At the same time, since foreign exchange has been converted into local currency, the oversupply of foreign exchange will further promote the exchange rate of local currency.
exchange rate system
Exchange rate system, also known as exchange rate arrangement, is a system widely adopted by countries to determine the exchange rate between their own currencies and other currencies. It is a systematic stipulation made by countries or the international community on the principles, methods, ways and systems for determining, maintaining, adjusting and managing exchange rates. The exchange rate system has a great influence on the exchange rate decision-making of various countries.