Market demand for exchange rates between participants

Market demand for exchange rates between participants

The main participants in the foreign exchange market-who are they? About global foreign exchange dealers
Do you want to become a successful foreign exchange trader? Everyone who decides to try trading in the foreign exchange market will inevitably be interested in the counterparty with which they are trading. This question is natural to him: now let us consider each set of characters that deal with online currencies for foreign exchange separately. Since all other participants in the foreign exchange market only have funds in bank deposits and carry out trading turnover through the bank in their accounts, all other participants in the foreign exchange market can operate on this trading volume, Therefore they ensure the execution of margin currency trading on the main trading volume. By accumulating market demand for foreign exchange and operating with customers' funds, banks use their own funds for foreign exchange transactions. The essence of foreign exchange is three-quarters of interbank lending. It may be a major participant in foreign exchange transactions, conducting a large number of foreign currency transactions between banks. If we are talking about changes in interest rates or exchange rates, they are the result of foreign exchange transactions between international banks. International banking companies have billions of dollars in daily turnover and play a leading role in the formation of exchange rates and market trends in price changes. The change in market trends is due in part to the fact that banks-participants in the foreign exchange market-trade to buy certain currencies, form demand lines for them, and sell other currencies, thereby reducing the demand for them. As long as the number of transactions used to buy and sell various currencies tends to be equal, the foreign exchange market is in equilibrium. Usually called flat. When the demand line (or conversely, the supply line) prevails, the market begins to move and forms an upward or downward trend on it. Companies engaged in international trade have always needed foreign exchange when conducting import transactions. On the contrary, they need to sell foreign exchange in export transactions. The main form of placement and attraction of foreign exchange reserves of such companies is short-term deposits in commercial banks. These companies conduct transactions through these deposits without directly entering the foreign exchange market. These foreign exchange market participants are engaged in the management of a variety of securities investment portfolios, Newmarket which are composed of securities owned by governments of various countries and large companies (international investment funds).

Almost any country’s central bank acts as a regulator of the exchange rate, and in the event of major changes in the nature of the foreign exchange currency market, it uses so-called foreign exchange intervention measures to prevent the country’s economy from crisis. The central bank’s task is to maintain the balance of exchange rates between imports and exports through investment plans, changes in interest rates and money supply. The central bank implements the supervision of the national exchange rate in an autonomous manner and can participate in the implementation of major investment plans through joint efforts. The central bank has direct access to the foreign exchange market and is a full participant in the market. Brokerage houses act as intermediaries between currency traders buying and selling currencies in the foreign exchange market, conducting deposit and exchange business between these counterparties, charging swap fees and commissions for this intermediary function. Basically, the size of the commission is determined in the form of a percentage of each completed transaction, called the spread.

Such foreign exchange market participants include traders or groups of traders represented by individuals or brokerage trading centers, and private investors have entrusted them to manage their capital. If all the above-mentioned participants in the foreign exchange market have legal entities, then private traders will undoubtedly belong to the category of individuals. In addition to foreign exchange transactions planned off-site, such as the exchange and trading of cash and currency, foreign exchange remittances, collection of fees, pensions or salaries of foreign employers, etc., since 1987, individuals have become official participants in the foreign exchange market and become investors And speculators. Margin trading. Introduction to Exchange Rates and Forex Markets