GMS 724 Lecture Notes - Lecture 9: Foreign Exchange Market, Reserve Currency, Futures Exchange
5 Mar 2019
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Document Summary
Money denominated in the currency of another nation or group of nations. It can be in the form of cash, funds available on credit and debit cards, traveler"s checks, bank deposits, or other short-term claims. The top banks in the inter-bank market in foreign exchange can. The largest volume of foreign exchange activity takes place with the big money center banks. Dealers can trade currency by telephone or electronically through reuters, ebs, or bloomberg. In addition to currency trades, these companies also provide market data, news, quotes, and statistics about different markets. The spot rate is the exchange rate quoted for transactions that require delivery within two days. Outright forwards involve the exchange of currency beyond three days at a fixed exchange rate, known as the forward rate. An fx swap is a simultaneous spot and forward transaction - one currency is swapped for another on one date and then swapped back on a future date.
