国际货币与金融经济学课件02.pptVIP

Chapter 2The Market for Foreign Exchange The Foreign Exchange Market Exchange Rate The value of one currency relative to another currency as the number of units of one currency required to purchase one unit of the other currency. Foreign-Currency-Denominated Financial Instrument A financial asset, such as a bond, a stock, or a bank deposit, whose value is denominated in the currency of another nation. Spot Market Characteristics It is the oldest and largest financial market in the world: Has no central trading floor where buyers and sellers meet. Is open twenty-four hours a day, except for short gaps on weekends. The spot market is a market for immediate delivery (2 to 3 days). Primarily an interbank market, which is the trading of foreign-currency-denominated deposits between large banks. Global banks account for about two-thirds of the market volume, while foreign exchange brokers and dealers account for approximately 20 percent. Approximately $US1.4 - 1.6 trillion daily in global transactions. A Foreign Exchange Transaction Toshiba receives a dollar denominated payment from Best Buy, which they present to Fuji Bank. To exchange the dollar payment for the yen equivalent, Fuji Bank may contact another bank, such as Citigroup, or contact a FX broker. Currency Trading Tables Typical FX tables in a daily business publication provide spot and forward rates. US $ equivalent or US $ per currency is the dollar price of a unit of foreign currency (eg., $/€). Currency per US $ is the foreign currency price of one US dollar (eg., €/$). Some Additional Terminology:Direct - Indirect Quotes Direct quote is the home currency price of a foreign currency. Indirect quote is the foreign currency price of the home currency. Appreciating and Depreciating Currencies A currency that has lost value relative to another currency is said to have depreciated. A currency that has gained value relative to another currency is said to have appreciated. These terms relate to the market pro