|
| Trading Features | There is no uniform foreign exchange market. Because currency markets are able to operate without intermediaries, there is a huge amount of interrelated marketplaces, where different currency instruments are bought and sold. This means that a single dollar rate doesn’t exist – there is rather a number of different rates (prices), which depend on the product that is being traded by the bank or market maker. In actual fact the rates are often very similar, otherwise arbitrageurs would exploit them.
London, New York, and Tokyo are the main trading centers but banks from different countries also participate. When the Asian trading session ends, the European one begins, after that the US session, and then the Asian one. Traders can respond to news when it breaks, rather than waiting for opening the market.
There is little or no 'inside information' in the foreign exchange markets. The instability of the exchange rate is usually caused by actual monetary flows and also by expectations of changes in monetary flows caused by alterations in GDP growth, interest rates, inflation, budget and trade deficits or surpluses, and some other macroeconomic conditions. A lot of people have access to the major news as it is released publicly. |
|
