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What is a firm foreign exchange transaction and what is it?
A transaction in which a customer converts his freely convertible foreign exchange (or foreign currency) into another freely convertible foreign exchange (or foreign currency) through a domestic commercial bank is called "foreign exchange firm transaction". The so-called "firm offer" means that in this kind of transaction, customers can't use the financing method similar to that in futures trading, that is, after paying the deposit, they can raise money from the bank and enlarge the transaction amount several times.

The currencies that domestic commercial banks can use for firm foreign exchange transactions basically include US dollars, euros, pounds, Japanese yen, Swiss francs, Canadian dollars, Australian dollars and Hong Kong dollars. These currencies are freely convertible. Foreign exchange firm trading does not provide transactions involving non-convertible foreign exchange (or foreign currency). Please consult the bank where you open an account about which currency can be exchanged and which currency cannot be exchanged.

When you make a firm foreign exchange transaction, if you exchange another freely convertible foreign exchange (or foreign currency) for US dollars, this transaction is customarily called "direct transaction"; If you exchange two freely convertible foreign currencies (or foreign currencies) other than US dollars, this transaction is customarily called "fork transaction".

When representing an exchange rate, the base currency comes first, the target currency comes last, and the middle is separated by "/",indicating how many target currencies a unit of base currency can exchange. There are two ways to quote the exchange rate involving the US dollar. The quotation method based on USD is called "direct quotation", such as USD/JPY. The target currency of USD is called "indirect quotation", such as EUR/USD.

The firm foreign exchange transaction adopts T+0 clearing method. After the customer completes a transaction, the bank computer system automatically completes the delivery of funds immediately. In other words, if the market fluctuates greatly, investors can seize multiple profit opportunities in one day.