The implications of the foreign exchange market not being a centralized market is that there is no single quote for the traded currency: this depends on the different actors involved in the market.
The forex market is a global market, but 24-hour access is limited by the parentheses of operations at the weekend. Even in these periods of disruption, traders can place positions, purchase or sale that will be invigorated when the market begins to fluctuate.
Financial institutions can use the Belize Forex License participate in the market for speculative purposes, hedging or acting on behalf of a client. Any international economic transaction, from a transfer to buying a foreign stock involve the previous step by the foreign exchange market to make the forex needed to perform the main operation.
Until recently, foreign exchange traders were active in this business, and gave the parties negotiating the effective enforcement of its orders in exchange for a fee. Today, However, much of this business has moved to more efficient electronic systems such as EBS, Reuters, the Chicago Stock Exchange, Bloomberg and Tradebook.
Commercial companies
Non-financial companies with Belize Forex License that operate with international customers and suppliers are also involved in the market. Their impact on the market in the short term is small. Nevertheless, trade flows are an important factor in the long-term behavior of a currency. In addition, some multinational operations can have unpredictable impact on changing the currency of small countries.
Central Banks
Central banks operate in foreign exchange markets to control the money supply, inflation and / or interest rates. They often impose exchange rates and use their reserves to stabilize the market.
The expectation or rumor of central bank intervention might be enough to change the value of a currency. However, central banks do not always achieve their objectives and in some cases the market may be imposed on the central bank. This happened in the 1992 – 93 debacle Exchange Rate Mechanism, and more recently in the Asia-Pacific.
It is equally important to note that during the negotiation period, the time of day that is accessed in this market has a direct impact on liquidity to operate in one or several currencies. The moments that the major world markets open are the most liquid, although the Forex market is not directly linked to the nature of these trading venues.
The main trading centers are those in London, New York and Tokyo. Asian markets open first, then the European and American markets eventually. The market opens Sunday afternoon (time of the U.S. East coast) and closes on Friday at 4:00 pm ET.
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