BIZCHINA / Finance/Investment |
Foreign exchange rate(Wordnet Dictionary)Updated: 2006-10-17 14:32 In the foreign exchange markets there is little or no 'inside information'. Rate fluctuations are usually to do with world economy or the national economies so significant news is released publicly so, at least in theory, everyone in the world receives the same news at the same time. This is in contrast to the equity market where a stock may lose value by 5% or more, and only later do the reasons for this become apparent when a newspaper reports that forecasts for that company have been revised downward, or that a key executive has resigned (this is why insider trading in stock markets can be a problem). Big foreign exchange trading centres are located in New York, Tokyo, London, Hong Kong, Singapore, Paris and Frankfurt amongst others and the foreign exchange market is open 24 hours per day throughout the week (closing worldwide Friday afternoon and reopening Sunday afternoon). If the European Market is closed the Asian Market or US will be open on the other and so all world currencies can be continually in trade. Traders can react to news when it breaks, rather than waiting for the market to open, as is the case with most other markets. This enables traders to take positions anticipating the impact on the exchange rate of important news items. In the foreign exchange markets there is never a 'bear' market. Currencies are traded in pairs; every trade involves the selling of one currency and the buying of another. If some currencies are going down, others must be going up. Scale
(For more biz stories, please visit Industry Updates) |
|