Foreign exchange classification
According to different sources and uses, foreign exchange can be divided into trade foreign exchange, non-trade foreign exchange and financial foreign exchange.
Trade foreign exchange, also known as physical trade foreign exchange, refers to foreign exchange derived or used in import and export trade, that is, international payment means formed by international commodity circulation.
Non-trade foreign exchange refers to all foreign exchange except trade foreign exchange, that is, all foreign exchange that is not derived from or used for import and export trade, such as labor foreign exchange, remittance, donation foreign exchange, etc.
Different from trade foreign exchange and non-trade foreign exchange, financial foreign exchange belongs to a kind of financial asset foreign exchange, such as inter-bank trading foreign exchange, which is neither derived from tangible trade nor intangible trade, nor used for tangible trade, but used for the management and manipulation of various currency positions. Capital transfer between countries should also take the form of money. Whether it is indirect investment or direct investment, financial assets flowing between countries have been formed, especially the large number of international hot money, frequent transactions and far-reaching influence, which cannot but attract special attention from relevant parties.
Trade foreign exchange, non-trade foreign exchange and financial foreign exchange are all foreign exchange in essence, and there is no insurmountable gap between them, but they are often transformed into each other.
Characteristics of the market
Judging from the regional scope and peripheral speed of foreign exchange transactions, the foreign exchange market has two basic characteristics: spatial unity and time continuity.
The so-called spatial unification refers to the use of modern communication technologies (telephone, telegraph, telex, etc.) in foreign exchange markets of various countries. ) foreign exchange transactions, so that the relationship between them is very close, the whole world is more and more linked together, forming a unified world foreign exchange market.
The so-called time continuity means that the foreign exchange markets in the world alternate with each other in business hours, forming a circular operation pattern. The component of the foreign exchange market is the trading company or individual of the draft. Buy and sell foreign exchange bills with its own funds to obtain the bid-ask difference. Most foreign exchange dealers are operated by trust companies, banks and other institutions 24 hours a day, and the market is characterized by global market and 24-hour intermittent aging.
The role of financial foreign exchange
As a means of payment for international settlement, foreign exchange is an indispensable tool for international economic exchanges. It promotes international economic and trade development and political and cultural exchanges. Debt relations occur between different countries. Because of the different monetary systems, a country's currency cannot circulate in other countries, and the purchasing power of different countries cannot be transferred, except for the internationally recognized means of repayment-gold. With the development of foreign exchange business of banks, various credit instruments (such as bills of exchange) representing foreign exchange are widely used in the world, which makes it possible to transfer the purchasing power of money between different countries. ② Promote the development of international trade and capital flow. Foreign exchange is the product of international economic exchanges. Without foreign exchange, the international turnover and utilization of funds cannot be accelerated, and international economic, trade and financial exchanges will be hindered. Paying off international creditor's rights and debts with foreign exchange can not only save the cost of transporting cash and avoid transportation risks, but also avoid capital backlog and accelerate capital turnover, thus promoting the development of international commodity exchange and capital flow. (3) Conducive to the regulation of international capital supply and demand. For example, in order to speed up the pace of construction, developing countries need to selectively use long-term and short-term credit funds in the international financial market and find a way out for the surplus funds of developed countries. Therefore, foreign exchange can play a role in regulating the surplus and shortage of funds between countries, and can be used to balance the balance of payments, stabilize the exchange rate and repay foreign debts.
Foreign exchange trading market
The foreign exchange market is the largest financial product market in the world. By September 2007, the average daily trading volume reached 3.2 trillion US dollars, equivalent to 30 times that of the US stock market and 600 times that of China stock market. Daily foreign exchange trading refers to the way of buying one currency in a pair of currency combinations and selling the other currency at the same time. The exchange rates of various currencies in the international market fluctuate frequently, and they are traded in the form of currency pairs, such as Euro/USD or USD/JPY.
The main advantage of the foreign exchange trading market lies in its high transparency. Due to the huge transaction volume, the main funds (such as government foreign exchange reserves, multinational consortium fund exchange, foreign exchange speculators fund operation, etc. ) has a very limited impact on market exchange rate changes. On the other hand, from the fundamental analysis of exchange rate fluctuations, it is usually the important data released by governments (such as GDP and central bank interest rates), the speeches of senior government officials, or the news released by international organizations (such as the European Central Bank) that can have a greater impact.
There is no specific place in the foreign exchange market, and there is no central exchange. All transactions are conducted between banks through the Internet. Any financial institution, government or individual in the world can participate in trading 24 hours a day.
central bank
Responsible for issuing domestic currency, controlling money supply, holding and dispatching foreign exchange reserves, and maintaining the internal and external value of domestic currency. Under the floating exchange rate system, the central bank is often forced to buy or sell foreign exchange in the foreign exchange market to intervene in the foreign exchange market and maintain market order. For example, the seven major industrial organizations (G7) composed of the United States, Japan, Germany, Britain, France, Canada and Italy often hold summit meetings and reach agreements on the exchange rates of major currencies to limit the range of exchange rate fluctuations. Due to the frequent joint intervention of G7, the exchange rate is stable; Sometimes, the central bank will intervene in the open market for the purpose of adjusting monetary standards or policy needs. Intervention basically takes a different position from the market public, usually without special factors, and the central bank will not take the initiative to intervene. Under normal circumstances, the central bank's intervention in the foreign exchange market can only achieve temporary results, so that the exchange rate will not rise or fall too fast, but it cannot change the long-term basic trend.
bank
In any place, whether it is the main foreign exchange market or not, ordinary petty cash transactions and cheque cashing are almost monopolized by banks. The main business of the bank's foreign exchange department is to convert customers' assets and liabilities in commercial and financial transactions from one currency to another, which can be handled through spot transactions or forward transactions. As a large number of banks are engaged in foreign exchange trading, foreign exchange trading is becoming more and more popular.
foreign exchange trading
Foreign exchange, like the stock market, has many brokers in any active market, which is called an exchange in the United States.
Dealer) role, just for the purpose of collecting commission, negotiate exchange agreements for foreign exchange transactions for customers, draw and rub between buyers and sellers, and buy and sell directly or indirectly through the contact of foreign exchange brokers. Foreign exchange brokers and brokers themselves do not bear the profit and loss risks of foreign exchange transactions, and the price of their intermediary work is commission income (brokers
Fees or commissions), foreign exchange brokers are familiar with the supply and demand of foreign exchange in the market, the analysis of news and charts, as well as exchange rate fluctuations and trading procedures, so investors are willing to adopt them.
fund
This kind of institution is basically similar to a securities firm in nature, but the difference is that [it] often buys and sells itself, and it can also selectively bear the risk of profit and loss according to its own wishes, while banks and securities firms are often its trading partners.
Foreign exchange supply and demand sides
Foreign exchange supply and demand sides arising from trade, payment settlement of goods by importers and exporters after export or import, and transportation, insurance, tourism, study abroad, buying and selling foreign bonds, securities and funds, and interest payment.
Foreign exchange investor
The so-called foreign exchange investors, in order to predict the rise and fall of the exchange rate, use spot, forward or forward trading channels to engage in large foreign exchange transactions with a small amount of margin. When the market is bullish, they buy first and then sell. When the market is bearish, they sell first and then make up their positions, earning the price difference in the middle with minimal fluctuations and making huge profits. Therefore, foreign exchange investors are often the main foreign exchange investors.
Main trading methods
In China, there are two foreign exchange trading methods suitable for small and medium-sized investors: foreign exchange firm trading, that is, those foreign exchange treasures and foreign exchange margin trading of banks. The former can open an account through a bank, while the latter is mainly handled by some foreign distributors in China, because there are no domestic distributors at present.
Real deal
Firm foreign exchange trading is also called spot foreign exchange trading. Personal foreign exchange trading in China, also known as foreign exchange treasure, refers to the trading behavior of individuals entrusting banks to buy and sell one foreign currency into another with reference to the real-time exchange rate in the international foreign exchange market. Because investors must hold enough foreign currency to trade, the internationally popular foreign exchange margin trading lacks the short selling mechanism and financing leverage mechanism of margin trading, so it is also called firm trading. Since Shanghai Industrial and Commercial Bank 1993 began to act as an agent for individual foreign exchange transactions, with the substantial growth of individual foreign exchange deposits of Chinese residents, the introduction of new trading methods and the change of investment environment, individual foreign exchange transactions have developed rapidly and have now become the largest investment market except stocks in China.
So far, many banks, such as industry, agriculture, China, construction, communications, China Everbright and so on. , have carried out personal foreign exchange trading. Domestic investors, with foreign exchange in their hands, can open accounts and deposit funds in any of the above-mentioned banks, and can conduct foreign exchange transactions through the Internet, telephone or over the counter.
Margin trading
Foreign exchange margin trading, also known as virtual trading, means that investors use their own funds as a guarantee to enlarge the financing provided by banks or brokers for foreign exchange trading, that is, to enlarge the trading funds of investors. The financing ratio is generally determined by banks or brokers. The greater the financing ratio, the less money customers need to pay.