scholarly journals Foreign Exchange Market and the Asset Approach

2021 ◽  
Vol 9 (9) ◽  
pp. 351-356
Author(s):  
Dr. Varsha Agarwal
Keyword(s):  
International Trade ◽  
Exchange Rates ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Trade Flows ◽  
Exchange Market ◽  
Abstract Exchange ◽  
Relative Prices ◽  
Goods And Services

Abstract: Exchange rates play a central role in international trade because they allow us to compare the prices of goods and services produced in different countries. A consumer deciding which of two American cars to buy must compare their dollar prices. Households and firms use exchange rates to translate foreign prices into domestic cur-rency terms. Once the money prices of domestic goods and imports have been expressed in terms of the same currency, households and firms can compute the relative prices that affect international trade flows. Keywords: Foreign Exchange, Exchange Rate, International Trade, Foreign Currency, FOREX Rate, Assets Approach.

scholarly journals TRANSAKSI VALUTA ASING (AL-SHARF) DALAM PERSPEKTIF ISLAM

IQTISHODUNA ◽  
2011 ◽  
Vol 3 (2) ◽  
Author(s):  
Muhammad Sulhan
Keyword(s):  
International Trade ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Islamic Law ◽  
Exchange Market ◽  
Demand And Supply ◽  
Written Text ◽  
The Moment ◽  
Currency Conversion

The written text attempts to explain transactional problem (trade) foreign exchange of Islamic law trade. It is caused by the international trade phenomena that won’t be free from state currency one another as a payment tool in which accelerate the traffic of international trade activity.  The necessity of currency conversion in the international trade will bring up out of foreign exchange demand and supply in the foreign exchange market; it will cause foreign exchange trade transaction at last. Based on the variety of Islamic laws analysis, it is known that the foreign currency  trade practice (al-sharf) is allowed if done based on each other agreement and cash, not to have a speculation (undertake something hoping for the best), there is transactional needed or aware of (saving), and if the transaction done toward the same type of currency so, it must have the same value and if it’s different, it must be done using prevailed rate of exchange (kurs)  in the moment of transaction. The following types of foreign exchange transaction in the foreign exchange market, it is only spot transactional type allowed, meanwhile forward, swap, and option are forbidden because they aren’t cash and contain of maisir (speculation). Besides, the participants should pay more attention toward constrains of foreign exchange trade transaction and they should be able to avoid divergences that are forbidden in Islamic of syariah trade like extortionate, forcing and many others. In this case, these cause the transaction of foreign exchange trade is prohibited.

scholarly journals HEDGING CURRENCY RISKS IN INTERNATIONAL BUSINESS USING THE OPPORTUNITIES OF THE INTERNATIONAL FOREIGN EXCHANGE MARKET

2021 ◽  
Author(s):  
Olena Liegostaieva
Keyword(s):  
Exchange Rate ◽  
Foreign Exchange ◽  
International Business ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Exchange Market ◽  
Currency Risk ◽  
Exchange Rate Fluctuations ◽  
Current Value ◽  
Financial Result

The article is devoted to the study of currency risk hedging in international business. The article notes that the international foreign exchange market is the largest and fastest growing of all world markets. The characteristic features of the international currency market are substantiated and offered. It is also noted that foreign exchange transactions provide economic ties between participants located on different sides of state borders: settlements between firms from different countries for the supply of goods and services, foreign investment, international tourism and business travel. It is determined that hedging of currency risks is the protection of funds from the unfavorable movement of exchange rates, and is carried out in fixing the current value of funds by concluding an agreement on the foreign exchange market. When hedging, the risk of exchange rate changes disappears, and this makes it possible to forecast the company's activities and see the financial result, which is not distorted by exchange rate fluctuations, which will allow you to determine product prices, calculate profits, etc. The main difference between hedging and other types of transactions is that its purpose is not to generate additional profits, but to reduce the risk of potential losses, as risk reduction is almost always necessary to pay, hedging, of course, involves additional costs. Hedging is a way to improve business planning. An enterprise wishing to use this service shall pledge the specified amount, from which losses on its positions will be deducted. In today's conditions, thanks to the foreign exchange market, there is a very reliable way to hedge currency risk. This method is to fix the current value of funds by concluding agreements in this market. With hedging, the company eliminates the risk of exchange rate fluctuations, and this allows you to forecast activities and see the financial result, which is not changed by exchange rate fluctuations. Allows you to pre-determine product prices, determine profits, etc. Thus, the principle of hedging in international business is to open a currency position in a foreign currency account for future transactions to convert funds.

Devisenmarktoperationen und Informationspolitik der Europäischen Zentralbank

2002 ◽  
Vol 3 (1) ◽  
pp. 49-68
Author(s):  
Michael Frenkel ◽  
Christian Pierdzioch ◽  
Georg Stadtmann
Keyword(s):  
Exchange Rates ◽  
Foreign Exchange ◽  
Foreign Exchange Market ◽  
Information Policy ◽  
Transmission Channel ◽  
Exchange Market ◽  
European Central ◽  
Transmission Channels ◽  
Market Intervention ◽  
Foreign Exchange Market Intervention

AbstractThis paper analyzes the effectiveness of the foreign exchange market interventions of the European Central Bank (ECB) by studying the information policy of the ECB and examining whether the ECB relied on a specific transmission channel to influence exchange rates. Against the background of a discussion of the transmission channels through which foreign exchange market interventions of central banks may affect exchange rates, we are led to the conclusion that the information policy of the ECB was not in line with the assumptions underlying the transmission channels discussed in the theoretical literature. We argue that this finding could provide a possible explanation for the ineffectiveness of the ECB's foreign exchange market intervention in the fall of 2000.

scholarly journals The equilibrium model of demand and supply at the Ukrainian Interbank Foreign Exchange Market: disclosure of problematic aspects

2017 ◽  
Vol 12 (4) ◽  
pp. 31-43 ◽  
Author(s):  
Anzhela Kuznyetsova ◽  
Nataliia Misiats ◽  
Olha Klishchuk
Keyword(s):  
Foreign Exchange ◽  
Equilibrium Model ◽  
Foreign Exchange Market ◽  
Inflation Targeting ◽  
Foreign Currency ◽  
Gap Analysis ◽  
Exchange Market ◽  
Demand And Supply ◽  
Trade Offs ◽  
The One

This article is devoted to building of the equilibrium model between demand and supply on foreign currency at the Ukrainian Interbank Foreign Exchange Market (non-cash share). The authors discussed that appeared trade-offs are a product of established current foreign arrangement, administrative measures provided by the National Bank of Ukraine and range of fundamental variables, which are traditionally significant for Ukrainian economy. By means of FAVAR modeling model of demand and supply equlibrium on non-cash foreign currency was built on empirical data of Ukrainian Interbank Foreign Exchange Market, splitted into the periods, proposed by the authors. Next, it was discussed disconnection properties in the model and shown log-linearized specification of the one. The efficiency of fulfillment hypothesis on decointegrating of the fundamental variables' time series has been provided in form of critical statistics values. Also, instrument of GAP analysis of deviation from equilibrium state was proposed and the further analysis of a regulation style of monetary authority was provided. In conclusion, it was summarized that increased share of the cash out of the banks has significantly jeopardized the price stability in Ukraine and the NBU interventions would become more effective if the flexible foreign exchange rate will be accompanied with flexible regime of inflation targeting.

scholarly journals EXCHANGE MARKET PRESSURE INDEX AS A MACROECONOMIC RISK MEASURING INSTRUMENT

2020 ◽  
pp. 10-20
Keyword(s):  
Economic Development ◽  
International Trade ◽  
Foreign Exchange ◽  
Financial Stability ◽  
Foreign Exchange Market ◽  
The State ◽  
Exchange Market ◽  
Republic Of Moldova ◽  
Pressure Index ◽  
The Republic

The financial sector of the Republic of Moldova belongs to the developing ones and is characterized by a higher level of risk and, therefore, a higher likelihood of a systemic crisis. Globalization and development of advanced information technologies not only create great opportunities for rapid economic development, but also pose serious security threats to the economic development of states, especially in a developing economy. In these conditions, the issue of ensuring the financial stability of the state is becoming increasingly relevant. The state of the financial and foreign exchange market represents one of the most important aspects of the financial security of the state. This study has been developed as part of the scientific project 15.817.06.02A "Development of tools for measuring the financial stability of the state". The study analyzes various macrofinancial risk management tools. The purpose of this study was to calculate the pressure index on the foreign exchange market of both the Republic of Moldova and the main partner countries in terms of international trade. The results of related studies conducted by the authors of this work, which revealed that stability indicators in the foreign exchange market are associated with foreign trade risks served as an argument for the authors of the work to calculate the pressure index on the currency market of Romania and the Russian Federation for comparison with the indicators of the Republic of Moldova. Methods used in research include theoretical and comparative approaches, descriptive statistics and econometric models. The results of the research showed that international trade and the foreign exchange market are interdependent. The first can be considered a channel for transmitting the currency crisis, since demand increases with increasing imports, and this leads to increased pressure on the foreign exchange market. Increased exports reduce pressure on the foreign exchange market. But the greatest impact on the foreign exchange market in the Republic of Moldova is made by remittances from abroad, which are directly correlated with the dynamics of labor exports. At the same time, it was concluded that at present, due to macroprudential regulation, there are no linear dependencies in financial markets and, therefore, there are no correlations, but only the interdependence of variables.

scholarly journals ACQUAINTANCE TO FOREX FOREIGN EXCHANGE MARKET

2020 ◽  
pp. 174-180
Author(s):  
O. Zaitsev ◽  
T. Dvorianova
Keyword(s):  
Foreign Exchange ◽  
Professional Training ◽  
Foreign Exchange Market ◽  
Foreign Currency ◽  
Point Of View ◽  
Easy Access ◽  
Exchange Market ◽  
Potential Threat ◽  
Currency Market ◽  
Financial Transactions

The article draws attention to the steady growth of the general trend of direct participation of individuals in financial transactions using electronic platforms. In particular, the article notes the increased interest in participating in operations in the Forex currency market. It is emphasized that relatively technically easy access to participation in financial transactions through the use of electronic platforms is currently a potential threat to financial security for the funds of participants in such transactions. This is a lack of professional training of most novice traders who voluntarily become participants in financial transactions. It is emphasized that stock exchange transactions on stock markets, purchase and sale of currency on electronic platforms, transactions with gold, etc. require, along with general, also special knowledge on certain specific areas of economic development and financial relations. Also, psychological and behavioral factors begin to "work" in such relationships. It is noted that only from the beginning of 2019 in Ukraine at the legislative level began a systematic regulation of the structure of the foreign exchange market and the procedure for trading in foreign currency. The article states that it is time to pay attention to digitalized trading activities from a professional point of view and start teaching in educational institutions the relevant disciplines for training and acquiring students' general skills in trade and financial transactions on electronic platforms. From this point of view, the article provides an introductory review of the Forex currency market, outlines the principles of its operation, pays more attention to trading strategies. As a result, the following conclusions are made that, first, the foreign exchange market is highly profitable provided that its trends are mastered; secondly, the foreign exchange market is high risk; it is necessary to understand not only in many terms, but, especially, in processes and situations in the financial-globalized world to confidently use charts of change of cost of currencies for profit; thirdly, there are many different strategies that can be used successfully in the currency market, from the simplest - for amateurs, to more complex - for experienced traders, but none of them will fit perfectly for a particular psychotype, professional level and amount of time a person - trader can pay trade. Of particular value, according to the authors, is the following conclusion: a trader creates his own strategy, which provides a greater likelihood of earnings in the international Forex market. Currency trader is a creative activity, but an activity based on mastering a large base of professional knowledge.

scholarly journals The “day-of-the-week” effects in the exchange rate of Latin American currencies

2019 ◽  
Vol 14 (PNEA) ◽  
pp. 485-507
Author(s):  
Roberto Joaquín Santillán Salgado ◽  
Alejandro Fonseca Ramírez ◽  
Luis Nelson Romero
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Foreign Exchange ◽  
Latin American ◽  
Foreign Exchange Market ◽  
The United States ◽  
Management Decision ◽  
Exchange Market ◽  
Day Of The Week ◽  
The Exchange Rate

This paper examines the “day-of-the-week” anomaly in the foreign exchange market of six major Latin American countries’ currencies: (Argentina, Brazil, Chile, Colombia, Mexico, and Peru), all with respect to the United States’ dollar. The returns of daily exchange rates are stationary, so we use linear regressions combined with GARCH, TARCH and EGARCH models to explore the presence of the “day-of-the-week” anomaly. The results confirm the presence of “abnormal” effects in some of the currencies and in some days of the week, particularly on Fridays and Mondays. Moreover, volatility in exchange rates shows clustering behavior, as well as leverage effects, which are carefully modelled in our analysis. This paper contributes to the literature by studying the “day-of-the-week” effects in currency exchange rate markets, a clear innovation with respect to the typical stock market analysis. The results reported are useful for foreign exchange market traders, currency exposure management decision makers, monetary authorities, and financial policy designers in the countries included in the study. Indeed, the results suggest the presence of a typical behavior of the exchange rate of all the currencies included in the sample.

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