Particularly for foreign exchange market there is no market place called the foreign exchange market. It is mechanism through which one country’s currency can be exchange i.e. bought or sold for the currency of another country.
The foreign exchange market does not have any geographic location. The market comprises of all foreign exchange traders who are connected to each other through out the world. They deal with each other through telephones, telexes and electronic systems. With the help of Reuters Money 2000-02, it is possible to access any trader in any corner of the world within a few seconds.
Like any other commodity, the price of one unit of foreign currency can be stated in terms of domestic company. Thus, the rate of exchange means the price of one currency in terms of another country.
For instance, the price of US Dollar can be expressed in terms of Indian Rupees. If US Dollar 1 = INR 43, it means the exchange rate of US Dollars and Indian Rupees is 1: 43.
Exchange rates are normally quoted in terms of a buying rate, a flat rate, and a selling rate. The buying rate is that which a bank will pay for a foreign currency. The selling rate is the rate a bank will charge for the currency, and the flat rate is an average of the buying and the selling rates. In other words, the exchange rate is said to be the rate at which a number of units of one currency can be exchanged for a number of units of another currency.
The foreign exchange market does not have any geographic location. The market comprises of all foreign exchange traders who are connected to each other through out the world. They deal with each other through telephones, telexes and electronic systems. With the help of Reuters Money 2000-02, it is possible to access any trader in any corner of the world within a few seconds.
Like any other commodity, the price of one unit of foreign currency can be stated in terms of domestic company. Thus, the rate of exchange means the price of one currency in terms of another country.
For instance, the price of US Dollar can be expressed in terms of Indian Rupees. If US Dollar 1 = INR 43, it means the exchange rate of US Dollars and Indian Rupees is 1: 43.
Exchange rates are normally quoted in terms of a buying rate, a flat rate, and a selling rate. The buying rate is that which a bank will pay for a foreign currency. The selling rate is the rate a bank will charge for the currency, and the flat rate is an average of the buying and the selling rates. In other words, the exchange rate is said to be the rate at which a number of units of one currency can be exchanged for a number of units of another currency.