Foreign exchange as a constant for entrepreneurs

Forex is a key variable for the founder and funder.

Keep track foreign exchange, foreign exchange rates and exchange rates of foreign currencies, may be important for entrepreneurs.

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Foreign exchange and foreign exchange rates

Currency in the economy

As foreign exchange is referred to values in foreign currencies, which exist in forms other than bank notes. Foreign banknotes are known to distinguish these varieties as currency . If foreign currency bank notes , however, placed in an account in that currency, then lose their varietal character and to foreign exchange. The Banking says , like the economy, with " foreign "on foreign currencies issued foreign currency, these include checks, money orders or drafts. Foreign exchange permit the immediate payment of debts in foreign currencies and thus represent a purchasing power in that currency constitutes at the foreign exchange market of trade in these currencies according to market rules by a direct encounter between supply and demand for foreign exchange instead . In the course of this trade the foreign exchange to domestic currency will be formed. This rate of exchange , commonly referred to as the exchange is , therefore, the price in domestic currency, the foreign currency is worth a certain date in exchange. On the foreign exchange market is an unfettered exchange, the so -called Foreign exchangeOnly possible if the affected currencies and convertible , that is interchangeable with each other are . Worldwide a large number of currencies are freely convertible , but even today there are currencies which this free convertibility is missing. For the trading of foreign exchange has its own currency exchange, determines to which an official agent to the respective spot rate than the average rate on a given date . Daily in the early afternoon set 17 institutes average exchange rates and shall publish these in Reuters. These courses will count from banks and other foreign currencies.

Trading and speculation in foreign exchange

Foreign exchange reserves resulting in a state by a positive TradeIf the value of exported goods on the import of goods is . The resulting surplus of foreign exchange is economically an important sign of a strong economic power of the state and has a positive effect on the rating of the State concerned. He reduces the country risk for investment in this State, by facilitating payment of interest and repayment of debt with foreign creditors. Since it is in foreign exchange to assets, can also be speculated with them. It will seek to achieve a particular currency from exchange rate changes by a corresponding investment in that currency or currency out of profits. A special form of currency speculation, arbitrage , which at the same time in different places of the world uses the existing differences in price for a profit . Besides the banks, there are mostly large international companies, currency speculation and arbitrage - operate . In the first case , foreign exchange is bought or pushed to achieve at a later date through the "Closing" opposite transaction called a profit. In the foreign exchange arbitrage currency at the same time on two different markets is bought and sold , when such a transaction recommended by different exchange rates. Since purchases and sales are made at the same time , the arbitrage completely without risk, while speculation also includes a risk of loss . Banks and other institutions dealing in foreign exchange, either surpluses or shortages of foreign exchange balance , or to hedge currency risks . A distinction is the spot foreign exchange transaction in which the foreign exchange is exchanged immediately after the conclusion of business , from the forward foreign exchange contract , in which the actual execution of the exchange at a later date is determined. The difference in percentage between a foreign exchange spot and forward exchange rate is referred to as " swap points ". If the futures price on the spot price is called the "Report" , the spot price were higher than the forward rate, called the " Deport ". For a currency option gives the right to buy at a specified time a certain amount of foreign currency at a fixed price ( call option ) or sell ( put option ). The relevant exchange rates are published promptly as exchange rates in many newspapers and on the Internet . These publications are also often Analysis alternates who are to inform the investor about the possible future development of exchange rates.

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