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About the video:
You may have traveled a lot and wondered why you get more of one currency when you exchange it for another. If so, you have witnessed exchange rates in action, but do you know how they work? Watch the video to find out what exchange rates are, how to convert between them and the different systems which determine a currencies exchange rate. Historically the gold standard system had been used, which fixed currency to a select value of gold, held in a vault. The three main systems are the floating, managed and fixed exchange rate systems. The floating system has minimal government intervention, using supply and demand to determine the exchange rate. The managed exchange rate is allowed to be within a permitted band and a fixed exchange rate is usually pegged to a currency with the interest of being competitive in the international market. The video explains this in more detail and with helpful picture to guide you through the subject.
The Foreign exchange is a gamble just like the stock market..except the Foreign Exchange is bigger..with more money..average trading in the stock market is 200 billion a day..the average exchange of currency a day is 5 trillion a day for the forex..You need a good computer and software to keep up with the results of everyday forex..and a course study of how to read the charts.
Sounds like a crock of shit to me. What’s gold got to do with anything!!??? To the government it’s aparently worth millions yet I could give 2flying fucks about it n don’t own 1 thing gold. The system is so fucked it’s hillarious i google how currency holds a value an get like 3 diff answers all of which make zero fucking since.
This is not simple at all. It involves part of microeconomic law supply and demand, and the video explanation is way too fast. For beginner with no economic background, it's little bit hard to understand the whole video.
The key to understanding exchange rates is to understand how the bureaucracy works.
Can you explain that please? E.g. a tourist lands in a country and exchanges foreign currency for local tender.
The transaction is registered to the reserve bank. But what then?
Is the local reserve bank linked to all other reserve banks, and updates on all ledgers take place in real time?
For example if the government borrows money increasing the money supply, does that also effect the parity in real time as that money is dispersed and multiplied?
I mean how large must the servers be to handle all that data? Is that done by the bank of international settlements?
Wouldn’t certain people be in a position to speculate based on that info? Specially in smaller countries with a small banking cartel.
So really it’s about who gets what information first essentially?
The interbank market also then operates based on market info knowing what prices to set then I take it? But wouldn’t the reserve bank have all that info at their disposal, and if it’s private and global then why wouldn’t the owners speculate or use that information to control geo politics?
I suppose they do though.
It’s kind of like the diamond monopoly.
Is there any difference if someone goes to bank and change is local currency for whatever purpose and the foreign exchange done on online platforms which is done mainly to profit?
Am very confused if there are the same thing
There are supply of money and demand of money. What I can understand after studying an economic book myself is that the more you demand, the higher the value, or appreciates, ceteris paribus (others stay constant)
Take MYR-RM and USD-$ for example. To purchase a Malaysian made item, an american needs to exchange his $ to RM and that is a demand of RM. When people starting to increase buying items made in Malaysia, higher demand of RM will eventually drive the value of RM up, since it has become ''rarer''. However, when people started to reduce the import of Malaysian item, lesser demand for RM would occur, therefore, depreciation of RM happens, since theres more RM in the market, it becomes ''common''. A fixed exchange rate means that under the manipulation of the government, the currency wouldn't rise or fall in value. For example, when the currency appreciates, government would need to make the money less ''rare'' by injecting more local currency into the market, to maintain the fixed value of the currency. For the depreciation of currency, government uses foreign reserve like other currency and gold to purchase own currency in order to lower the circulating of local currency in the market. For managed currency, government sets 2 points called ceiling and floor to manage the over dropping and over rising of the currency value. The currency is allowed to ''float'' in a certain point, up and down but if reached the ceiling and floor point, government will take action as similar to the fixed exchange rate.
(I might be wrong, feel free to correct me).
And also fking buy RM our currency is depreciating tremendously. :)
Could a country print its currency secretly, having duplicates notes (same serial number) and then make some citizens go around the globe and exchange the currency for any different country? Expending that amount abroad wouldn't create inflation in the original country, and you would have much more wealth( from the asset bought abroad) and everything would turn out of printing out simple paper.
Would that scam work?
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Bull shit explanation ask how come 21 trillion defecit currency is so strong are you willing to talk real sense of logic well let me remind most so call big countries sitting with GDP ratio is big defecit now explain how do auditing done of these bankers moves ROTH CHILD CARTEL'S CONTROL ALL THESE BANKING SYSTEM DON'T TRY BOOK BASED NONSENSE EXPLANATION WE UNDERSTAND SHIT OF YPUR MANUPLITATED FIGURE'S 🐒😇😎??
+JP just think if you move from India to USA while the currency is about 65₹ per dollar and when you return India if it is 70₹ or above per dollar then we get more right? If you take 65 rupees from India when the currency is 65₹=1$ so we get 1 dollar, then if we return from USA with 1$ while the currency is high like 70₹ per dollar so we get free 5₹
Am i right? I'm not sure i think there will be some adjustments
+Salam Miah yes there are many things that can change rates but most important thing is gdp of any country and its export and import and differnce between them and most important thing is b.o.p balance of payments.
I don't think you explain it simple enough. I don't know anything about business and I can't understand it after watching your video. There's some channels that make me understand what GDP per capita is even though I'm not from a business background
if you guys cant get simple things. and understand i suggest you to throw away your mobile phone cuz you are getting Facebook Dumb
Brain Washed.. and Life washed so you washed your lifes away.
you brains is full of shit . Please go to nature and empty your mind.
Why the value of US dollar is below Euro's value? Is it more profitable from the exports point of view? It means the goods are produced to a lower price (dollar) and sold to a higher price (Euro). A lower value of a certain currency could mean a higher exports value? Than, why Euro and GBP are kept to a higher than dollar?
Cause the pound and the euro is in higher demand that the U.s dolar, because of the free trade agreement in the Eu, alot of trades occur and demand for each currency is alot higher than others. So it's more 'expensive" than the dollar
Nope, you can't do in 5 minutes what at best takes 10, probably 20 minutes, and that's supposing the viewer has at least a foundational understanding of macroeconomics.
Of course, you could have gone with the whole Americans buying French Wine thing. That is, say there is an increased demand for French Wine from people holding US dollars, but not from people holding the Franc. This demand would cause some price pressure on the overall wine market, but in this instance more of the price-pressure is from the US dollar. Ordinarily, one might just raise the price overall, but because the main sector of the French Wine Market is from France (I assume), raising the price on everyone would cause the Franc holders(yeah, I know Euros, it's an example) to pick up more of the demand-price increase than is a true reflection of the market. So if there is a necessity to hold the current price in Francs, then it would be better to devalue the US dollar at the Foreign Exchange Bank. Of course, the actual value of the exchange rate is determined not only by the multitude of trade relationships taking place, but it is also influenced by speculators based on their own belief in future values derived from various individual pricing models.
For the record, I've left out how the value of a currency is initially determined, and probably a lot of other things, but my attempt was only to show the very narrow window of the basic idea why exchange rates vary without getting too complicated.
I hope that helped. Peace.
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So does this mean the pay grade or the stability of salaries in one country will affect the currency in other countries? For example, if the US government creates a number of new jobs, how will that affect the currency in Turkey?
For holding and trading foreign currencies basically, Forex trading accounts used. With a broker to open a trading account the process is and then invest some money and after that as a pair start buying and selling currencies. With Forex4you I had open my trading account. Opening a trading account with a good trading broker is very important to make the good amount of profit. Through this exchange business, the process is to make the profit.
When they fix, the central bank just keeps it fixed against another currency at the desired amount by buying or selling its own currency using foreign currency. Doesn't matter if the othet currency is fixed or floating. If the government says your currency is fixed, they will do whatever it takes to fix it. If it depreciates away from fixed price, they will buy their own currency using foreign currency. If it appreciates from fixed price, the government will sell their own currency and buy foreign currency.
At 2:10, did the US sell their exports to China? Is this why the US dollars fell in value to China’s Yuan which led to a rise in demand for Yuan? Or is it the other way round?
Also, when the Dollar to Yuan fell in value does this naturally mean that the Yuan to Dollar rose in value?
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Although foreigners may now invest in A-shares, there is a monthly 20 percent limit on repatriation of funds to foreign countries.
Performance of A-shares.
Since its inception in 1990, including a major reform in 2002, the index has seen great fluctuations. Overall, however, it has grown along with the Chinese economy. The years 2015 to 2016 were a particularly difficult period, with a 52-week performance of -21.55 percent as of July 20, 2016.
As China grows from an emerging market to an advanced economy, there is substantial demand for Chinese equity. Stock exchange regulators continue efforts to make A-shares more broadly available to foreign investors and have them recognized by the global investing community.
In June 2017, the MSCI Emerging Markets Index announced a long-awaited decision it would add stocks to its index. According to CNBC, MSCI will add 222 China A Large Cap stocks to its benchmark emerging markets index gradually beginning in 2018. The MSCI website reveals the stocks it will list include the Bank of China, China Merchants Bank, Guotai Junan, Ping An Insurance, according to a document on Tsingtao Brewery, SAIC Motor, Suning Commerce and Spring Airlines.
Current Dividend Preference.
Participating Preferred Stock.
Convertible Preferred Stock.
Cumulative preferred stock includes a provision that requires the company to pay preferred shareholders all dividends, including those that were omitted in the past, before the common shareholders are able to receive their dividend payments.
Non-cumulative preferred stock does not issue any omitted or unpaid dividends. If the company chooses not to pay dividends in any given year, the shareholders of the non-cumulative preferred stock have no right or power to claim such forgone dividends at any time in the future.
Participating preferred stock provides its shareholders with the right to be paid dividends in an amount equal to the generally specified rate of preferred dividends, plus an additional dividend based on a predetermined condition. This additional dividend is typically designed to be paid out only if the amount of dividends received by common shareholders is greater than a predetermined per-share amount. If the company is liquidated, participating preferred shareholders may also have the right to be paid back the purchasing price of the stock as well as a pro-rata share of remaining proceeds received by common shareholders.
Significance to Investors.