FIN 621 Chapter Notes - Chapter 4: Market Microstructure, Triangular Matrix, Currency Pair
6 Dec 2014
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Foreign exchange encompasses conversion of purchasing power from one country into another. Bank deposits of foreign currency, credit denominated in foreign currency, foreign trade financing, trading in foreign currency options and futures contracts and currency swaps. Twist is that 2 or more currencies involved. Reuters and ebs largest vendors of quote screen monitor used to trading currencies. Communication systems serve foreign exchange are extraordinarily sophisticated, surpassing in speed and efficiently the communication system. 3 major market segments australasia, europe, and north america. Europe zurich, frankfurt, paris, brussels, amsterdam, and london o o: north america new york, montreal, toronto, chicago, san. Certain trading centers have a more dominant effect on the market than others. Two tier markets: whole sale or interbank market, retail or client market. International bank, bank customers, nonbank dealers, fx brokers, central banks. International bank provides core of fx market o o o.
