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It is undoubted that Currency exchange is a very crucial and yet complex subject to understand. Especially those industrial terms make it all the more confusing. We will give you all the very basic terms related to forex for you to understand it.
Vacation Money Rate or Tourist Rate: this is only another term we know the sell rate as. You have just learnt the very basic terms related to exchange rate and now we will go deeper inside into the matter of Exchange market.
As the financial market change with very rapid course of time the currency exchange rates also fluctuates with that. It constantly moves up and down in order to match the changed value for money. There are some reasons that determine the ups and downs of the rate, such as:
The market of currency exchange rate is applicable only for the banks and the big companies. The currency a tourist get in a sell rate must differ from the basic spot rate as it takes a lot of people and effort as well as it passes through different process to reach your hand.
The foreign currency exchange market is the most liquid financial market in this whole world. All the govt. banks, commercial banks, other commercial corporations and institutes are included in this system. The average turnover of this global exchange market is rising with leaps and bounds. According to the survey performed in the year 2010, the average daily turnover of it is $3.98 billion.
In April 2010, trading in the United Kingdom was 36.7 % of all the businesses and thus making it the most important sector for the foreign exchange trading in the world. The biggest geographic trading center is the United Kingdom and primarily London. As the London market dominates the trade, a particular currency’s quoted price is the London market price.
It is a monetary system that allows the currency exchange rate to be changed according to the demand and supply rate in the market.
This is another term for Fluctuating currency exchange rate. In this exchange regime the currency’s value fluctuates as per foreign exchange market mechanism. The currency which uses floating exchange rate is also known as floating currency. A floating currency is contrasted with a fixed currency. In the modern world all the currencies of the different places are actually floating currency. The term fixed currency does not exist in real world market.
The most traded currencies are United States Dollar, the Indian rupee, The Euro, The Norwegian krone, the Japanese Yen, the British Pound and finally the Australian Dollar. ,A currency future also called as FX Future or Foreign Currency Exchange Future, is a contract for the future to exchange one currency for another at a predefined dated in the future at a rate that has been defined on the purchase date. These currency futures were first introduced in the year 1970 in New York. It was first created by the International Commercial Exchange (New York).