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FOREX MARKET

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Forex Market
q The foreign exchange market (forex, FX, or

currency market) is a global, worldwidedecentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends. The foreign exchange market
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the relative values of different

UNIQUE MARKET
Its huge trading volume representing the

largest asset class in the world leading to high liquidity.

Its geographical dispersion. Its continuous operation: 24 hours a day

except weekends.
The variety of factors that affect exchange
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rates.

MARKET SIZE & LIQUIDITY

Average daily Turnover was US$ 3.98 Trillon .

Trading in the United Kingdom accounted for

36.7% of the total, making it by far the most important centre for foreign exchange trading. Trading in the United States accounted for 17.9%, and Japan accounted for 6.2%
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Determinants of Exchange Rates

Economical Factors.

Political Conditions.

Market Psychology.
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Economic Factors
Government Fiscal Policy & Monetary Policy. Government Budget Deficits or Surpluses. Balance of trade levels and trends. Inflation levels and trends. Economic growth and health. 4/7/12

Political Conditions
Internal, regional, and international political

conditions and events can have a profound effect on currency markets.

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Market Psychology

Flights to quality. Long-term trends. Buy the rumor, sell the fact.

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Financial Instruments
SPOT FORWARD SWAP FUTURE OPTION 4/7/12

Market Participants
Central Banks Commercial companies Foreign exchange fixing Hedge funds as speculators Investment management firms 4/7/12

Codes for selected Currencies required for quotes USD US Dollar EUR Euro
GBP British Pound JPY Japanese Yen CAD Canadian Dollar DLR SEK Swedish Kroner
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IEP Irish Pound CHF Swiss Franc AUD Austrialian

MEP Mexican Peso

THANK YOU
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