The selling price and the buying price are not sent from the bank at the same time, but there is a time difference, so the prices are not in pairs, but one by one. So, why do spreads sometimes fluctuate greatly? Let's give an example. The Federal Reserve announced a rate hike. At this time, everyone knows that the US dollar interest rate is going to rise. Doing more dollars at this time will definitely make a lot of money, but this is not our focus. What we care about is why the spread has become very large at this time.

After raising interest rates, the exchange rate of the US dollar tends to increase, the loans of the US dollar will decrease, and the deposits of the US dollar will be given away, so there will be a situation in which the US dollar enters and exits. At this time, there are many people who often make more dollars, and the buying price of dollars will change dramatically, and then the selling price will not change so dramatically. The deficit of the two price changes has formed a sudden change in the spread that everyone sees on the disk.

Often these financial events will also affect the changes in overnight rate, and we will introduce the changes in overnight rate in the next article.