Latest topics
» Bán facebook voucher $50 uy tín
Mon Jun 16, 2014 3:14 pm by Admin

» Bạn là tín đồ mua sắm qua mạng?
Wed Apr 23, 2014 5:04 pm by AI NHI

» Thẻ Visa Prepaid mới: VISA FIFA World Cup 2014
Wed Apr 23, 2014 3:05 pm by Admin

» In thẻ nhựa tại Cần Thơ - giá rẻ - chất lượng cáo - uy tín
Tue Apr 22, 2014 5:02 pm by Admin

» WordPress Training
Sun Apr 13, 2014 10:01 am by Admin

» "Ví điện tử" là gì ?
Sat Mar 22, 2014 8:39 am by Admin

» How to Make the Forex Gurus Work for You
Sun Jan 12, 2014 11:02 am by Admin

» Iѕ  It  Worth Buying Affiliate Softwarе?  
Sat Jan 04, 2014 6:09 pm by alextmx

» how dоes аn affiliate marketer gеnеratеs income?
Thu Dec 19, 2013 11:44 pm by alextmx

Kinh doanh Forex - Vang tai khoan
Học choi forex online mien phi tai day FxViet - Truy cap Blog chuyên về Forex tại FxBlog Dot InfoMột số nguồn tài nguyên Forex khác: https://www.youtube.com/dautuforexMr. Phuong FXWebsite tin tức ForexChuyen trang tu van kien thuc Forex - Trade.MoiGioiForex.Com  - This Forex trade robot managed to turn a starting account of $10,000 into $499,785 during its 9 year backtest. Although it really seems too good to be true, I have compared the report with historical currency charts and their price movements and specific timings, and have found the report to be 100% accurate.

Bilateral Nature of Exchange Rates

Xem chủ đề cũ hơn Xem chủ đề mới hơn Go down

Bilateral Nature of Exchange Rates

Bài gửi by Admin on Fri Nov 29, 2013 7:57 pm

Bilateral Nature of Exchange Rates
By [http://ezinearticles.com/?expert=Ani_Stepanyan]Ani Stepanyan

The rate at which one currency is for another is called an rate. To put it otherwise it represents the value of one country's currency as compared to that of another. Currency rates are grouped into two main sub domains: Fixed Exchange Rates and Floating Exchange Rates.

Fixed Exchange Rates

A fixed rate which is also known as a pegged exchange rate signifies the fixed nature of a currency against the value of another currency. It is set by the government (central bank) which in order to maintain its currency buys and sells it on the Forex market in return for the currency to which it is fixed.

In case of fixed rates there is less speculative activity which mainly depends on whether Forex market dealers consider a given fixed exchange rate appropriate and credible or not.

Fixed rates put a discipline on employees and domestic firms to keep their costs under control as to remain competitive in international markets. This is of great help for the government to maintain low inflation by bringing interest rates down and stimulating increased trade and investment.

Floating Exchange Rates

A floating exchange rate is not determined by the government. It is determined by a private market based on supply and demand. This type of rate undergoes certain fluctuations depending on the market.

Therefore any difference in supply and demand will automatically affect the market. This can be explained in the following way: the low demand for a currency causes the decrease of a rel=nofollow [http://www.ifcmarkets.com/en/trading-instruments/spot-forex]currency value. This makes the imported goods more expensive and enlarges the demand for local goods and services. As a result more jobs will be generated, causing "self- correction" in the market.

Such currencies convey most heavily traded currencies like the United States dollar, the Euro, the Australian dollar, the British pound,the Norwegian crone, the Japanese yen, and the Swiss franc. A model of an ideal floating currency is the Canadian dollar as the Canadian central bank since 1998 has not interfered with its price. Conversely, Japan and the United Kingdom intervene to a greater extent.

No currency is absolutely fixed or floating.However the major part of currencies is floating. Sometimes when the true value of a local currency against its fixed currency becomes evident central bank becomes compelled to revalue or devalue the official rate in order to prevent the development of "black market". Central bank may also interfere in such cases as to prevent inflation and ensure stability.

While comparing these two currency rates it becomes obvious that a fixed rate represents a nominal rate which is set and maintained by the monetary authority.

On the other hand a floating rate, as determined by [http://www.ifcmarkets.com]Forex markets, fluctuates constantly depending on supply and demand. Moreover, it also turned out that monetary authorities have all the possibilities and the right to freely and flexibly determine, as well as maintain floating rates.

Article Source: [http://EzineArticles.com/?Bilateral-Nature-of-Exchange-Rates&id=7898360] Bilateral Nature of Exchange Rates

Admin
Admin

Tổng số bài gửi : 70
Join date : 27/11/2013

Xem lý lịch thành viên http://gold.forumvi.com

Về Đầu Trang Go down

Xem chủ đề cũ hơn Xem chủ đề mới hơn Về Đầu Trang

- Similar topics

 
Permissions in this forum:
Bạn không có quyền trả lời bài viết