Foreign exchange refers to the foreign currency held by a country and the means of payment for international settlement expressed in foreign currency.

The concept of foreign exchange can be divided into static and dynamic.

1, static concept

The static concept of foreign exchange refers to the means of payment expressed in foreign currency that can be used for international settlement. This means of payment includes credit instruments and securities expressed in foreign currency, such as bank deposits, commercial bills, bank drafts, bank checks, long-term and short-term government securities, etc.

2. Dynamic concept

The dynamic concept of foreign exchange refers to a specialized business activity that one country's currency pair is converted into another country's currency to pay off international creditor's rights and debts. It is short for international exchange.

What needs to be pointed out here is that the currencies of some countries are not freely convertible in the international market, so they can only be counted as foreign currencies, not as foreign exchange.

Second, the advantages of foreign exchange

1, 24-hour trading, T+0 trading;

2. Two-way trading, both rising and falling have profit opportunities;

3. Due to the existence of leverage, the investment cost is reduced;

4, the income is relatively rich, and it is possible to more than double the profit in a single trading day;

5, the risk is controllable, and the stop loss can be preset to stop winning;

6, the handling fee is low;

7. The global daily transaction volume exceeds 4 trillion US dollars, which is not easy to be manipulated;

8, high transparency, all markets, data and news are open;

9. The funds are flexible and can be withdrawn at any time;

10, fast trading, real-time foreign exchange trading in most cases.

3. What is the exchange rate?

Exchange rate, also known as exchange rate, refers to the price expressed by one country's currency in another country's currency, or the price comparison between two currencies. It is usually expressed by the conversion rate between two currencies. For example, USD /CNY= 1/7.2456, that is, the exchange rate between USD and RMB is 1: 7.2456, or USD 1 needs to be purchased with RMB 7.2456.

Four, several characteristics of the exchange rate

1, five digits display.

0.9705 euro

Yen 1 19.95

65438 +0.5237

Swiss franc 1.5003

2. The minimum change unit is a point, that is, the change unit of the last digit.

Euro 0.000 1

Yen 0.0 1

0.00065438

Swiss franc 0.000 1

3. ups and downs are described by "points"

According to market practice, the price of foreign exchange rate usually consists of five significant figures, counting from right to left, the first one is called "X point", which is the smallest unit of exchange rate change; The second name is "X ten", and so on.

For example: 1 Euro =1.101USD; 1 USD = 120.55 yen

The euro changed from 1. 10 10 to1.10/5, indicating that the euro rose 5 points against the dollar.

USD/JPY changed from 120.50 to 120.00, which means USD/JPY fell by 50 points.

Verb (abbreviation of verb) exchange rate pricing method

I. Direct quotation

Direct quotation is a way to express a unit's foreign currency exchange rate in domestic currency. Generally speaking, foreign currency of 1 unit or 100 unit can be converted into local currency. At present, most countries in the world adopt direct quotation, and China also adopts direct quotation. For example, the dollar against RMB is 1:6.4906.

Second, the indirect price method

Indirect pricing method is a method of expressing the exchange rate of a certain unit of domestic currency in foreign currency. Generally speaking, how many foreign currencies can be exchanged for the local currency of 1 unit or 100 unit? At present, only a few countries in the world adopt indirect pricing methods, such as pound, euro, Australian dollar, New Zealand dollar and Irish pound. For example, for Britain, the exchange rate of British pound against RMB is 1: 9.445438+0, which is the indirect pricing method.

6. What are the main products and symbols?

According to international practice, three English letters are usually used to indicate the name or code of currency.

Dollar: USD

Pound: Pound

Euro: Euro

Japanese yen: Japanese yen

Canadian dollar: Canadian dollar

Swiss franc: Swiss franc

Australian dollar: Australian dollar

New Zealand dollar: New Zealand dollar

7. Who are the market participants?

Participants in the foreign exchange market mainly include central banks, commercial banks, non-bank financial institutions, brokerage companies, self-dealers and large multinational enterprises. They trade frequently and the transaction amount is huge, each transaction is in the millions of dollars, even exceeding10 million dollars. Generally speaking, there are three motives for their participation:

1) international enterprises convert profits gained abroad into domestic currency through trade and investment.

2) Hedging, corporate finance ministers and fund managers will also use the foreign exchange market to reduce the risk of price fluctuations in futures trading.

3) Speculation for profit.

What are the major foreign exchange markets in the world?

At present, there are about 30 major foreign exchange markets in the world, which are distributed in different countries and regions on all continents. Among them, the most important ones are London, Frankfurt, Zurich and Paris in Europe, new york and Los Angeles in America, Sydney in Australia, Tokyo, Singapore and Hong Kong in Asia.

Nine, the main foreign exchange market trading hours

The foreign exchange market trades 24 hours a day. The world foreign exchange market alternates with each other in business hours, forming a circular operation pattern.