1. International settlement: As foreign exchange is a means of payment and settlement in international economic exchanges, clearing is the most basic function of the foreign exchange market.
2. Exchange function: buying and selling currencies in the foreign exchange market, and converting one currency into another as a means of payment, thus realizing the effective conversion of purchasing power of different currencies. The main function of the international foreign exchange market is to provide a currency conversion mechanism through complete communication equipment and advanced management means, so as to transfer the purchasing power of one country to another country and deliver it to a specific transaction object, thus realizing the transfer of purchasing power or funds between countries.
3. Credit granting: As banks are engaged in foreign exchange business, it is possible to provide loans to importers and exporters by taking advantage of the time difference between foreign exchange receipts and payments.
4. Hedging: namely hedging futures trading. This is different from the purpose of speculative futures trading. It is very important for importers and exporters not to profit from price changes, but to prevent foreign exchange income from being lost due to future exchange rate changes. If the exporter has forward foreign exchange income, in order to avoid the possible risks caused by exchange rate changes, the foreign exchange can be sold as futures; On the contrary, importers can also buy foreign exchange futures in the foreign exchange market to meet the needs of future payment.
5. Speculation: buying and selling foreign exchange in anticipation of price changes. In the forward foreign exchange market, speculators can take advantage of exchange rate changes to make profits, produce "bulls" and "bears" and bet on future market conditions. "Long position" means that the exchange rate of a foreign exchange is expected to rise, that is, it is bought at the current price. When the exchange rate of this foreign currency rises at the time of forward delivery, it can be sold at the "spot" price immediately, thus obtaining the difference of exchange rate changes. On the contrary, a "short" refers to the expectation that the exchange rate of a foreign currency will fall, that is, the foreign currency for forward delivery will be sold at the current price, and the price will fall after maturity and will be bought at the "spot" price. This kind of speculation is carried out by taking advantage of the fluctuation of foreign exchange market in different periods. In the same market, you can also take advantage of the exchange rate differences in different markets to carry out arbitrage activities at the same time.
Reply time: 202 1- 12-23. Please refer to the latest business changes announced by Ping An Bank in official website.