Characteristics of foreign exchange trading

There is no uniformity in the foreign exchange market. With the transaction outside the stock exchange trading (over the counter) as the traditional market of foreign exchange trading, a lot of foreign exchange markets are interconnected to each other where different currencies are traded, so it indirectly means that "there is no exchange rate but a single dollar exchange rate varies depending on what bank or market maker is trading ". However, in practice the difference is often very thin. The main trading centers are in London, New York, Tokyo and Singapore, but banks throughout the world to its participants. Foreign exchange trading occurs throughout the day. If the Asian markets ended the European market was opened and at the European markets ended the American market starting and return to Asian markets, except on weekends. Very little or even no "insider trading" or information "insiders" (Insider trading) which occurs in the foreign exchange market. Fluctuations in currency exchange rates are usually caused by actual monetary flows as well as by expectations of monetary flows caused by changes in the growth of Gross Domestic Product (GDP / GDP), inflation, interest rates, budget and trade deficits or trade surpluses, mergers and acquisitions as well as other macroeconomic conditions. Major news is released publicly, so that more people can access the news at the same time. However, large banks have an important value that they can see the current movement of "order" currency from customers. Currencies are traded with each other and each pair is a separate product, such as EUR / USD, USD / JPY, GBP / USD and others. Factor on one of the currencies eg USD will affect the market value of the USD / JPY and GBP / USD, this is a correlation between USD / JPY and GBP / USD. In the spot market, according to research conducted by the Bank for International Settlements (BIS), the most heavily traded products are EUR / USD - 28% USD / JPY - 18% GBP / USD (also called sterling or cable) - 14% and U.S. dollars "involved" in 89% of transactions conducted, followed by the euro (37%), yen (20%) and Pound Sterling (17%). Although trading in euros increased rapidly since the currency was issued in January 1999 1999, still dominates the U.S. dollar foreign exchange market. For instance, in trade between Euro and non-European currencies (XXX), usually always involves two types of trade are EUR / USD and USD / XXX, the exception only to trade EUR / JPY is the currency pairs that are still traded in the spot market between banks.