Submitted by: Submitted by tmichaels36
Views: 232
Words: 487
Pages: 2
Category: Business and Industry
Date Submitted: 05/19/2013 08:19 PM
Foreign Exchange Rates
Tony Anothy
FIN/366
November 11, 2011
Jerry Olsen
Foreign Exchange Rates
In the global financial industry, there is an exchange rate (foreign-exchange rate, forex rate, or FX rate) among two currencies where the rate of one currency is exchanged for another. This rate places value of one country’s currency compared to another’s currency.
These rates are set in the foreign exchange market that is available to a vast array of sellers and purchasers in a setting that has continuous currency trading 24 hours a day: except weekends consisting of 20:15 GMT on Friday until 22:00 GMT Sunday. Spot exchange rates reference the current exchange rates. There is a forward exchange rate that is the rate quoted and traded today, but, is paid for and delivered on a particular date in the future.
In the retail currency exchange market, a different buying rate and selling rate will be quoted by money dealers. Most trades are to or from the local currency. The buying rate is the rate at which money dealers will buy foreign currency, and the selling rate is the rate at which they will sell the currency. The quoted rates will incorporate an allowance for a dealer's margin (or profit) in trading, or else the margin may be recovered in the form of a "commission" or in some other way. Different rates may also be quoted for cash (usually notes only), a documentary form (such as traveller's cheques) or electronically (such as a credit card purchase). The higher rate on documentary transactions is due to the additional time and cost of clearing the document, while the cash is available for resale immediately. Some dealers on the other hand prefer documentary transactions because of the security concerns with cash.
References
The Financial Panic of 1907: Running from History (hhtp://www.smithsonianmag.com/history-archaeology/1907_Panic.html)
"The Congress...