The Foreign Exchange Market

John N. Kallianiotis
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John N. Kallianiotis: University of Scranton

Chapter 2 in Exchange Rates and International Financial Economics, 2013, pp 51-82 from Palgrave Macmillan

Abstract: Abstract The foreign exchange market is a form of international market for the trading of all national currencies. Financial centers all over the world function as anchors of trading among a wide range of different types of buyers and sellers around the clock, with the exception of weekends. This foreign exchange market determines the relative values (exchange rates) of different currencies. It also assists international trade and investment by enabling currency conversion, offering lines of credit in different currencies, and providing instruments of hedging exchange rate risk. Further, it supports direct speculation on the value of currencies and arbitrage profits between different markets, based on different exchange rates and interest rate differentials among countries.

Keywords: Exchange Rate; Interest Rate; Foreign Exchange; Hedge Fund; Spot Rate (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-31888-6_2

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DOI: 10.1057/9781137318886_2

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