ECTR
Data base of trade flow between major countries.
the currency market operates
24 hours a day during the business
... [Show More] week
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Approximately three weeks worth of global currency transactions amounts to?
World annual GDP
Three main entities that trade currencies
Financial investors, corporations, travelers
The largest bucket of entities that trades currencies
Financial investors buying and selling securities in foreign money. 45% of the volume being driven by banks,. security firms, and institutional investors. Commonly knows as "hot money".
Corporations
conducting global business selling goods and services across borders.
Travelers
Millions of people like you and me on business like you and me on business and leisure trips. Change currency for personal use.
Currency conversion calculations are easy when
One country locks its exchange rate to a major currency, as was done in 1944 at Bretton Woods. This is often done to offer the impression of certainty to business and consumers.
Pegged Currency
A currency based on the fixed exchange rate of another country's currency.
PEG function
table of currencies that are linked, or pegged to other countries' currency value. E.g. the hong kong dollar is pegged to the U.S. dollar at 7.8 Hong Kong dollars, while the Danish crown is pegged to the euro at 7.46 Danish crowns.
FX reserves
One of the key mechanisms that governments use to peg currencies. A huge stack of cash with which to manipulate the supply of and demand for a currency therefore manipulate its value.
Interest rates
In addition to FX reserves, governments also lift interest rates to defend pegs.
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floating currency
The values of currencies that are not pegged fluctuate in the world currency market. The values are expressed in terms of how much of the currency is needed to buy another.
Currency codes
select the FX ticker finder or FXTF function to see all 155 unique currencies
FXC
Currency Rates Matrix - to find currency pair values. Numbers in the matrix represent the amount of the currency in the amber column on the left it takes to buy one of the currencies represented by the flags along the top.
What generally happens when a central bank unexpectedly decreases interest rates?
The currency weakens. Governments yields go down deterring investment from around the world, reducing demand for that country's currency.
Main currency drivers
Surprise changes in interest rates, surprise changes in inflation, surprise changes in trade
When a central bank threatens to print a lot of money, the exchange rate will tend to?
depreciate. this is due to a surprise change in inflation expectations as printing money is inherently inflationary.
what does the Big Mac index show?
how currencies may be overvalued or undervalued. it uses prices of big macs around the world compared to the price of big mac in the u.s. as a proxy for currency valuation. [Show Less]