Term
| Foreign Exchange Market Players |
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Definition
- Central Banks - manages reserves
- Banks - execute transactions on behalf of customers
- Corporations - operate in foreign markets
- Money Managers - diversify/seek returns abroad
- Retail - travel, speculators, wire transfers
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Term
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Definition
| OTC market where brokerage firms and banks are connected over an electronic network. Traded 24-hours a day, five days a week. Daily dollar volume traded exceeds $1.4 trillion, making it the largest and most liquid market in the world. |
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Definition
London (hub) (BGNL)
Unites States (BGN)
Tokyo (BGNT) |
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Definition
- British Pound (GBP)
- New Zealand Dollar (NZD)
- Australian Dollar (AUD)
- Euro (EUR)
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Definition
| 1 USD gets you X amount of another currency. USD being the base. |
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Definition
| When USD is not in the quoted pair |
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Definition
FX trades bilaterally (between two entities), there is very little transparency.
*Rates do not have volume because it is OTC* |
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Definition
BGN - Bloomberg Generic
CMPN - looks at all the sources with stars next to them in ALLQ, out of all those sources it picks the best bid/ask prices in the perspective of the market taker. |
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Definition
| The price a seller is willing to accept for a security, aka offer price. |
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Definition
| The price offered for securities by one who wishes to buy them. Price willing to sell. |
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Definition
| a currency deal/market rate for delivery in T+2 days, it is a straightforward exchange of one currency to another. |
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Term
Spot Rate Settles Exceptions
T+1 day |
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Definition
- CAD (Canada)
- Philippines (PHP)
- Russia (RUB)
- Turkey (TRY)
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Definition
| Price agreed to now for a settlement date beyond T+2. Determined by interest rate differentials. OTC and customizable. NOT FORECASTS. |
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Term
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Definition
| Show the median forecasts which will not be affected by an outlier. They are economists' opinions. |
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| Higher Interest Rate set by Central Bank |
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Definition
| The domestic currency APPRECIATES, more investors in that currency bc they will receive a higher return. |
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| Lower interest rate set by the Central Bank |
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Definition
| Domestic currency depreciates, fewer investors in that currency bc they can receive higher return in another currency. |
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Definition
If growth is slow -> lower interest rates -> encourages investors to borrow $ -> increase consumption
Domestic currency will depreciate in times of slow growth. |
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Term
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Definition
difference between imports and exports.
Trade Surplus = Exports > Imports Currency appreciates
Trade defecit = Exports < Imports Currency depreciates |
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