Foreign Currency

Last updated 1 year ago

Foreign Currency

What Is Foreign Currency?

The foreign exchange market is the world's largest and most liquid financial market, with an average daily trading volume of $4 trillion. The exchange rates between countries can't be manipulated by institutions, the data is released by the national authorities.

Transactions are fair and transparent, 24 hours a day, T+0, two-way trading, and longing and shorting are profitable. The exchange rate refers to the price of one country's currency in relation to another country's currency, or the exchange ratio between the two currencies. Foreign exchange trading is actually taking the exchange rate as the trading object.

Influence Factors

Currency can be considered as a commodity, the price of which is most influenced by supply and demand. Some of the factors that influence the supply and demand of a currency are: the central bank's monetary policy, the country's economic situation, the geopolitical situation, natural disasters, etc.

The price of a commodity fluctuates up and down around its value, and the intrinsic value of a country's currency is determined by the country's credit and economic situation and is reflected in the country's economic data. Investors can determine the trend of the exchange rate by the economic data of each country.