Course summary (Foreign exchange market FOREX):
Objectives:
- To analyze the fundamentals of foreign exchange markets, understand their
functioning and examine some of the agents operating in these markets.
- We will also look at different methods of managing exchange risk. Forward
exchange contracts and currency options will be examined in greater detail.
The Foreign Exchange (FOREX) market is by far the biggest market in the world. The 1.5 trillion USD average daily turnover dwarfs the daily
turnover in all of the world's stock and bond markets combined. The New York
Stock Exchange has a daily trading volume of approximately USD 30
billion. One trillion USD (USD 1,000,000,000,000) changes hands every day
on global foreign exchange markets. 80% of this trading is of a
speculative nature, buying and selling money for profit's sake.
Investing in foreign exchange remains mainly a domain of the big
professional players in the market such as hedge funds, banks and brokers.
Example of the course Foreign exchange market (FOREX):
The currency exchange market is a true 24-hour market, 5 days a week. There are
dealers in every major time zone. The major dealing centers are: London
(50% of the market), followed by New York, Tokyo, Zurich, Frankfurt, Hong Kong and
Singapore, Paris and Sydney. The 1st session, which is the Asian session, begins on Sunday evening at approximately 7:00 p.m. EST (Sydney). The 2th session, which is the London session, begins at approximately 2:00 a.m.
EST. The 3th and final session, which is the New York session, begins at
approximately 7:00 a.m. EST and ends at 5:00 p.m. EST.
The Bank for international Settlements (BIS) is an international
organization
which fosters international monetary and financial cooperation and serves as a
bank for central banks.
Currency exchange rates are determined by the currency exchange market. A
currency exchange rate is always quoted for a currency pair using ISO code
abbreviations.
Finance of International trade - International bonds
