The forex market deals with trading currencies from all part of the world and these currencies have an ever changing rate, while some market are volatile, others have low volatility. Currency rate in forex is the value of a currency as against another currency. Currency rate is not static and it has the tendency of changing with regards to certain things. For example, the value of the United States dollar compared to the Japanese Yen may have a greater value by day and by night if there is a political clash in the United States and their economy is affected, the value if their currency drops and it won't be very surprising by next morning to see the Japanese Yen rated over the United States dollar.
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Foreign exchange (forex or fix ) is the trading of one currency for another. For example, one can swap the U. S. Dollar for the Euro. Foreign exchange transactions can take place on the foreign exchange market, also know as the forex market.
The forex market is the largest, most liquid market in the world, with trillions of dollars changing hands every day. There is no centralized location, rather the forex market is an electronic network of banks, brokers , institutions,and individual traders(mostly trading through brokers or banks). The market determines the value, also know as an exchange rate, of the majority of currencies. Foreign exchange can be as simple as changing one currency for another at a local bank. It can also involve trading currency on the foreign exchange market. A spot exchange rate is the rate of a foreign exchange contract for immediate delivery.
In the forex trading market, what we do is exchange a currency for the other, either by buying currency to secure another currency.
This is why it takes two currency pairing for a forex foreign exchange transaction.
A forex trading exchange rate is the rate or price at which it takes to buy or sell a particular currency pairs. This rate is mostly in four digit or five digit numbers.
The exchange rate is determine by the market, and it changes front time to time, and this changes is called the pips movement.
When a rate move, from let's says 2.4355 to 2.4356, it means that the price has move a pips.
Note : And currency pairs different exchanges rate.
The sum total traded in a process of individuals trading for certain commodities set the limit of the amount of money or goods or services that is considered to be a fair equivalent that is as well known as the amount of one currency that a person or institution defines as equivalent to another when either buying or selling it at any particular moment of the majority of currencies.
International current value as the rate at which anything is generally valued as currency rate demonstrate a specific measured amount of one unit of a currency can be trade or barter for another currency and to have an exchange value determined by the markets as opposed to by rule or to allow the exchange value of a currency to be determined by the markets, in actual situation they may change the recurring in steady, rapid succession based on a great amount or number of a business organization that lends money on accounts receivable or buys and collects accounts receivable or they can be a fixed exchange rate, where a currency's value is matched to the value of another currency or measure such as gold
to another currency and in a situation they still issue or sell shares in a company or units in a trust to members of the public followed by listing on a stock exchange although they move in an arrangement of two or more objects arranged one behind the other in support of the currency to which they price or earnings to growth ratio.
And to understand the value of a local currency in a set of ordered pairs to various of any currency that is in use in a foreign country, but not in one's own to helps investors to analyze a value that can be use of borrowed funds with a contractually determined return to increase the ability of a business to invest and earn an expected higher return, but usually at high risk priced in foreign designation for specific currency. Such as a become weaker of united stated dollar could rise the value between or among nations investments that increasing U.S. currency value can cause damage to the value of one's foreign investments.
Many countries can choose to apply to fix a value or price to the amount of one currency that a person or institution defines as equivalent to another when either buying or selling it at any particular moment which is set and to support artificially by the government. This set price or charge for all examples of a given case, commodity and services will not cause to vary irregularly occurring during a single day and may be set back to the initial state on a specific day in time at which a transaction or event takes place or is appointed to take place known as the process of altering the relative value of a currency or other standard of exchange dates.
What is Currency Exchange Rate in The Forex Market-:
Before someone can have his position executed, there is also someone at the other side of the market is is actually willing to take up the offer that this individual is giving, although this is what happens when we want to trade this market, we don't understand what is actually going on in thw background and hence we find out that sometimes we place a trade and we experience what is known as slippage, this is happening because the exchange rate that we are suppose to be using has automatically changed, this is why we would be requested by the Forex brokers to give us another price since the former one has automatically expired. These are some of the things that happened behind the scenes as we trade forex. The exchange rate is always determined by the liquidity providers.
Where am I?
EUR / USD The exchange rate was 1.2853
If the EUR / USD exchange rate is as follows ..
Since the euro is the main currency in the pair (the main currency always appears on your hand north)
We can only buy 1 euro, against what we see from the US dollar in the price visible before us on the trading screen, that is, we can sell the US dollar at 1.2853 in order to buy 1 euro.
In other words, the value of 1 euro = 1.2853 USD.
In other words, you can buy only 1 euro by selling $ 1 and 28 cents, at 53 points.
Here's a question ...
Why didn't we read 1.2850 and 1.2853? And what are these 3 points?
To answer this question you must first know these important terms:
(1) Base Currency
(2) Counter currency (reading currency)
The forex market is the biggest most fluid market on the planet with trillions of dollars changing hands each day. There is no brought together area rather the forex market is an electronic system of banks, representatives, organizations and individual dealers. The market decides the worth otherwise called a conversion standard of most of monetary forms. Remote trade can be as basic as transforming one cash for another at a neighborhood bank. It can likewise include exchanging money on the remote trade advertise. For instance a broker is wagering a national bank will ease or fix money related strategy and that one cash will fortify versus the other.