|
Term |
Explanation |
|
Foreign
exchange market. |
Function: · Means
of payment and settlement for international economic transactions ·
Currency
Exchange · Hedging套期保值/对冲 (by exchange the currency to another
currency to avoid the risk cause by fluctuation of exchange rate.) · Speculation
(by earning the gap price between ask and bid) · Provide
Credit 授信 (provide loan by taking
advantages of time difference of foreign exchange receipt and payment.) · International
transfer of purchasing power (stimulate market and economic) |
|
Global
Market Trading Hour |
Totally
market is open for 24 hour per days, but it was only certain country
market open at certain time period per day. Foreign exchange market open for
5 day per week.
In
fact: This
will cause the Time advantages in some country such as China. Usually at
China people get off work after 5 pm and more able to catch up with the most
volatile time period from 12:00 to 24:00. |
|
Foreign
exchange market participant. |
·
Liquidity
seekers and profit seekers ·
Bank
and non-bank foreign exchange dealers (earning gap price between bid and ask
price.) ·
Foreign
exchange Broker or agent. (Middleman between buyers and sellers by provide
intermediary services.) ·
Individual
and firm ·
Speculators
and arbitragers. ·
Central
bank and treasuries (use the market to buy or sell currency to influence
their own currency value) |
|
Foreign
exchange market components |
Continuous
Linked Settlement. (CLS銀行) ·
CLS
function as bank which take place in the transaction through its account in
central bank of various countries to complete the “payment versus payment”
(PVP) ·
CLS作为银行，通过其在各国央行的账户进行交易，完成 “支付对支付” （PVP）
society
for worldwide interbank financial telecommunication环球银行金融电信协会 ·
The
member-own society that provide safe, secure and creditable financial
transaction for its member by provide the member a unique swift id code that
able to identify the information such as country, bank and so on. ·
会员拥有的社会，通过为会员提供唯一的能够识别国家、银行等信息的swift id代码，为其会员提供安全、可靠和可信的金融交易。 |
|
Foreign
exchange market tools |
Forward远期交易 Refer to the transaction that both
parties agree to deliver the agreement at agreed time period according to the
agreement condition such as amount, type of currency and price. 指交易双方根据约定的金额、币种、价格等约定条件，约定在约定的时间期限内交付协议的交易。 Spot即期交易 Refer to the transaction that both
parties agree to make a transaction according to the current real-time market
price. 指双方同意按照当前实时市场价格进行交易.
Swap掉期交易 Refer
to both parties agree to exchange assets at the certain period in the future. 指双方同意在未来一定时期内进行资产交换。 ·
Spot
against Forward Dealers buy currency at spot
market and sell back in forward market to the same bank. ·
Forward-forward
swap Dealers sell and buy different
currency at the same time for hedging purpose. ·
Non
deliverable Forwards无本金远期汇率交易产品
Clearing
House Interbank Payments System The
system operates by NYCHA for payment and settlement purpose, which mainly
deal with dollar transaction. 该系统由 NYCHA 运营，用于支付和结算，主要处理美元交易。 |
|
Market
Convention |
BID
price买入价 The
price that dealer willing to pay in certain type of currency to buy another
currency
ASK Price卖出价 The
price that dealer willing to receive in certain type of currency to sell another
currency.
Bid-Ask
Spread买卖价差 Refer
to the situation while Ask price is slightly higher than bid price
Direct
Quote直接报价 Price
of a foreign currency in domestic (home) currency units. Example: EUR
1.567 /1 USD
Indirect
Quote间接标价 Price
of the domestic currency in foreign currency units Example: EUR
0.6381 / 1 USD |
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More Info:
https://spotthewrld.blogspot.com/2021/06/what-is-pearsons-uncertainty.html
Describe any FOUR (4) factors that cause a shift in the demand curve
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