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International Rose and Currency Operations - Savluk M.І.

10.3. Quotation of currencies. Courses of buying and selling

The foreign exchange rate is the price of a grocery single unit in the country, it is rotated in penny single units in the country. The price of the largest international currency market is seen on a daily basis and in favor of the singing currency, in the country with an exchange rate of conversion, the price of the national currency will become the central bank.

We will clarify the conversion operations vidpovіda exchange rate spot. Currency exchange rates for spot market є the basis for the rozrahunka exchange rate for all terminovyh lands - forwards, swaps, futures, options. This course is the basis of the basics, so at the time of the znіnі course the spot zmіnyuєtsya quotation of the land іz derivatives.

On monitors when the land is empty by telephone, the dealers will randomly book two currencies: the base currency and the quoted currency.

1 USD = 106.53 JPY or USD / JPY = 106.53,

1 EUR = 0.9567 USD or EUR / USD = 0.9567,

1 CHF = 0.8935 CAD or CHF / CAD = 0.8935.

Leva partina kotiruvannya is the base currency (USD, EUR, CHF), the rights partin is the currency kotiruvannya (JPY, USD, CAD). Currency exchange rates are set to the base currency, so that the currency is quoted in one of the basic currencies. In case of a good deal, please take a look at the important sign, with a certain currency and a basic currency - with a base currency with a currency quoted. As a rule, say, buy USD / JPY, that means you buy US dollars and sell Japanese onu (US dollar is the base currency). If you transfer news in new ways, since you started to cherish GBP / JPY, then you should know everything, so the British pound sterling has become more expensive, having made all the difference in Japanese. If you really want to please yourself in the amount of currency that is quoted, then you need to negotiate to negotiate.

At most local currencies, foreign currencies are violated in national currencies. Directly quoted, the value of the national currency for one foreign currency unit. Thus, historically, practically all currencies turned out to be tidy up to the American dollar: the national currency is singed for one US dollar. At the direct viewer of course there are official rates of most currencies - USD / CHF, USD / DEM, USD / ITL, USD / JPY. Quotation “USD / DEM 2.0156” means $ 1. USA Dorivnyє 2,0156 Nimetsky brands (1 USD = 2,0156 DEM). On the Forex market, exchange rates of major currencies look at how currencies are quoted to the US dollar, so the US dollar є the base currency is practical for all currencies. All the information about the role of the American currency as a foregone and nayprivlivlivshy rozrahunkova odnitsі, vikoristovuvano at the international trade.

Indirectly viznacha singing the number of foreign currencies per unit of national currency. In the case of indirect indirect quotation, the dollar to Swiss franc rate will be: CHF / USD = 0.5898 with rounded to the fourth decimal place of the Komi.

Indirectly quoted currencies are quoted in currencies, and our currency (in our application CHF) is the basis of quotations. The course of low currencies is of course set to the US dollar at the indirectly viewed view. The entire dollar exchange rate to the European currency unit Euro, the British pound sterling, as well as to the penny currency unit, the colony number of the United Kingdom is EUR / USD, GBP / USD, AUD / USD, NZD / USD, IEP / USD and the other.

For example, the EUR / USD rate = 0.9658 means that, for one euro price is 0.9658 dollars USA.

The reasons for the pound sterling being quoted in the base currency currency view are screaming for the British pound as the most common currency of the British Empire, which has serviced the magnificent part of the retail trade turnover. With the pound sterling, they donated their currency in foreign countries to the cob of the 20th century, including the USA.

The smallest possible smallest rozmir zmіni exchange rate is called the point (points), but pips (pips). Це - the remaining digits when writing the exchange rate. For the pound sterling, the German brand, the Ukrainian hryvnia and most major currencies - the price is 0.0001, for the Japanese currency - 0.01. One hundred items add up to a great figure.

For example, the pound sterling rate has fluctuated from 1.6142 to 1.6122. That means that the British pound sterling has fallen by 20 points in the amount of the US dollar. At the Japanese exchange rate from 110.54 to 108.54, to say, she has become more expensive as a result of the US dollar by two dollars, but Dolar has become cheaper by the price of two dollars.

On the foreign exchange market, foreign exchange rates are quoted in two countries - bid and offer (ask).

Bid - the rate of purchase of basic currency (the rate of sale of currency is quoted) by a market maker.

Offer - the rate of sale of the base currency (the rate of purchase of the currency is quoted) by the market maker.

As a rule, quotation is like this:

Market maker quote = bid / offer

EUR / USD = 0.9956 (bid) / 0.9960 (offer)

abo EUR / USD = 0.99 56/60

CHF / JPY = 65.27 / 65.32

or CHF / JPY = 65.27 / 32.

Slam zapam'yatati: at the bid side, wait for the smaller side of the offer.

On the screens of the Reuters information system, currency rates can be found on the other side - FX = (usable currency rates), EFX = (currency rates, which are quoted in Europe), EUR =, GBP =, JPY =, UAH = (currency rates) . For example, Japanese є on, ро euro, English pound sterling is shown on the screen at the table’s table:

Ric

Bid / ask

Contributor

Loc

Screen

Deal

Time

High

Low

Jpy =

107.67 / 71

CHASE

Lon

Chca

Chcl

15:46

107.88

106.56

EUR =

0.9787 / 91

CITIBANK

VIE

CITN

CATS

15:45

0.9756

0.9810

GBP =

1,5864 / 69

ABN AMRO

PAR

Aabn

Aabp

15:45

1,5840

1,5893

At the table є takі danni:

  • yak currency;
  • parties to bid and ask;
  • Bank, schist vistav kursi;
  • yogo location (location), (LON - London, NYC - New York, VIE - Viden, PAR - Paris, SIN - Singapore);
  • the name of the bank to the Reuters information system;
  • Dealing code for the bank in the Reuters Dealing system;
  • hour, if they made a quote;
  • nayvishche і naynizhche value course for ext.

Wait for є two tipi participants - market-maker (market-maker) and market-taker (market-taker), otherwise, as they say, market-user (market-user).

The market maker is an active participant in the market, a kind of buyer and seller, whichever exchange rates and dictate your own mind.

Market-taker is a passive participant in the market, who needs to drink quotes and little energy for the situation on the market, to ensure that the market-maker is in place. If, as a rule, market-takers are in large numbers and enter them to the market, then market-makers should be able to correct their quotes. Soundly of other commercial banks, private banks - financial funds, companies, speculators, hedgers, physical persons. Please note that I’m a great bank, but a market taker, and I’m surely washing the exchange rate in an old bank. A market taker is welcome to relocate to the newcomer with a market maker: look forward to a better price, and selling is cheaper.

It’s important for you to see how you can do it, kim vi є to the market, don’t have mercy, on the other side of the course you should please. For example, the AAA Bank will supply the Euro rate to the US Dollar to the BBB Bank. VVV Bank at this time є market-maker і whistavlyaє rate of 0.9870 / 0.9880. In this application, the BBB Bank has a coup є euro (selling US dollar) for a price of 0.9870, and a selling є euro (kupu є dollar) for a price of 0.9880. AAA Bank, at its mercenary, has a market taker and sell Euro at the rate of 0.9870 (buy US dollar), and a buy at Euro (sell US dollar) at the rate of 0.9880.

Let’s take a look butt. Bank XXX put a quote on YYY bank for 1 million Swiss francs: “USD / CHF = 1.6545 / 55” (I don’t need to tell the great fidget to sign the offer side for sure, I won’t be so awkward, like a dot). Quotation is direct - US dollar є in the base currency, Swiss franc - is quoted currency. YYY Bank is a market-taker, it’s powered up, so you can buy 1 million Swiss francs from XXX Bank with a rate of 1.6545, and sell a Swiss franc at 1.655. XXX Bank - market maker, win dictation, base currency (US dollar), buy and sell on the bid side - 1.6545, and sell on the offer side - 1.655.

Riznitsya between the right and the left sides of the quotation is called a spread. Spread є by the bank to the market-maker’s bank to conduct operations with customers and banks. The spread might look like a “fee for servants”, a market maker will buy a cheaper one, and sell it more expensive. For example, if the bank puts the quotation “1.9567 / 75”, then the spread becomes 8 points.

On the rosmir spread the spread of reasons:

  • Counterparty status і character vіdnosin іzh counterparties . Rozmіr the spread is greater for the bank’s bank, lower for the higher banks in the bank’s market. As a rule, banks with counterparties stretched out to a number of rookies for a couple of positive posi- tions, one day out of business, no one dealers, and one dealers of banks are kind enough to know one thing, then the spread is wider.
  • Rinkova conjuncture . In the minds, if the course is shvidko zmіnyuєtsya, rosіmіr spread zvichayno greater. For example, in the minds of an open exchange rate of the dollar on the international markets of bagato banks, you will be quoted for no less than 10 points, rather than 3-5 yen, for nothing.
  • Cotiruvana is the currency of that market . The spread of the spread is greater when the bank is quoted by the bank of к exotic ’currencies anyhow for the perks of the less liquid market.
  • Suma please. Chim bіlsha suma please, a smaller spread, so the market-maker should be very timid with great sums - he has a bigger profit, and vitrati is the same. That’s why, for the benefit of customers, for the sake of pleasing on the big sumi, the market-maker has a smaller spread. For example, AAA Bank - a market maker for the GBP / CHF market and two banks that turned out to be worthless. Two banks turned up - BBB Bank with a total of GBP 20,000,000 and CCC Bank with a total of GBP 200,000. It’s good for the AAA bank to have a better and better operation with the BBB bank, that’s why you need to set the exchange rate at 2-3 points (due to your interest), and I will water-reserve the CCC bank at 5-7 points.