Foreign Exchange

Exchange Rates Currency band Exchange rate Exchange rate regime Fixed exchange rate Floating exchange rate Linked exchange rate In finance, the exchange rate (also known as the foreign-exchange rate, forex rate or FX rate) between two currencies specifies how much one currency is worth in terms of the other. ... Image File history File links Forex. ... The currency band is a system of exchange rates by which a floating currency is backed by hard money. ... The exchange rate regime is the way a country manages its currency in respect to foreign currencies and the foreign exchange market. ... A fixed exchange rate, sometimes (less commonly) called a pegged exchange rate, is a type of exchange rate regime wherein a currencys value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold. ... A floating exchange rate or a flexible exchange rate is a type of exchange rate regime wherein a currencys value is allowed to fluctuate according to the foreign exchange market. ... A linked exchange rate system is a type of exchange rate regime to link the exchange rate of a currency to another. ...

Markets Foreign exchange market Futures exchange The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. ... A futures exchange, is a corporation or organization which provides a marketplace in which to trade derivatives such as futures contracts and options. ...

Products Currency Currency future Forex swap Currency swap Foreign exchange option Forex swap is an over the counter short term interest rate derivative instrument. ... A currency swap is a foreign exchange agreement between two parties to exchange a given amount of one currency for another and, after a specified period of time, to give back the original amounts swapped. ... In finance, a foreign exchange option (commonly shortened to just FX option) is a derivative where the owner has the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. ...

See also Bureau de Change A Bureau de Change is an organisation or facility which allows customers to exchange one currency for another. ...

A currency future, also FX future or foreign exchange future, is a futures contract to exchange one currency for another at a specified date in the future at a price (exchange rate) that is fixed on the last trading date. Typically, one of the currencies is the US dollar. The price of a future is then in terms of US dollars per unit of other currency. This can be different from the standard way of quoting in the spot foreign exchange markets. The trade unit of each contract is then a certain amount of other currency, for instance EUR 125,000. Most contracts have physical delivery, so for those held at the end of the last trading day, actual payments are made in each currency. However, most contracts are closed out before that. In finance, a futures contract is a standardized contract, traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price. ... ISO 4217 Code USD User(s) the United States, the British Indian Ocean Territory[1], the British Virgin Islands, Cambodia, East Timor, Ecuador, El Salvador, the Marshall Islands, Micronesia, Palau, Panama, Turks and Caicos Islands, and the insular areas of the United States Inflation 2. ... The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. ...

Investors use these futures contracts to hedge against foreign exchange risk. They can also be used to speculate and, by incurring a risk, attempt to profit from rising or falling exchange rates. Investors can close out the contract at any time prior to the contract's delivery date. In finance, a hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. ...

Currency futures were first created at the Chicago Mercantile Exchange (CME) in 1972, less than one year after the system of fixed exchange rates was abandoned along with the gold standard. Some commodity traders at the CME did not have access to the inter-bank exchange markets in the early seventies, when they believed that significant changes were about to take place in the currency market. They established the International Monetary Market (IMM) and launched trading in seven currency futures on May 16, 1972. Today, the IMM is a division of CME. In the second quarter of 2005, an average of 332,000 contracts with a notional value of USD 43 billion were traded every day. Most of these are traded electronically nowadays [1]. President George W. Bush at the CME (March 6, 2001). ... 1972 (MCMLXXII) was a leap year starting on Saturday. ... A fixed exchange rate, sometimes (less commonly) called a pegged exchange rate, is a type of exchange rate regime wherein a currencys value is matched to the value of another single currency or to a basket of other currencies, or to another measure of value, such as gold. ... The gold standard is a monetary system in which the standard economic unit of account is a fixed weight of gold. ... The International Monetary Market (IMM), largely the creation of Leo Melamed, is part of the Chicago Mercantile Exchange (CME), the largest futures exchange in the United States and the second largest exchange in the world for the trading of futures and options on futures. ... May 16 is the 136th day of the year in the Gregorian Calendar (137th in leap years). ... 1972 (MCMLXXII) was a leap year starting on Saturday. ... 2005 (MMV) was a common year starting on Saturday of the Gregorian calendar. ...

Other futures exchanges that trade currency futures are Euronext.liffe [2] and Tokyo Financial Exchange [3] A futures exchange, is a corporation or organization which provides a marketplace in which to trade derivatives such as futures contracts and options. ... Euronext. ...

The IMM dates are the third Wednesday in March, June, September and December.

See also

• List of finance topics