I want to spend a few minutes today to talk about 4
Foreign exchange
We looked at hoffman-laroche the
Their accounts
Where is chf
Swiss
Frank the statements of ali baba and side effects were in it
Cny chinese yuan toyota orange app
Japanese yen
App for citibank and ge
Where in u.s. dollars
Macroeconomics class might explain
An economy with barter one good or service for
For another
Baghdad
What do you on demand
An exchange between banks through bank deposits with the sin
Central bank
Is the most liquid glide in all markets
Foreign exchange
Is the exchange of
51 central banks the
Deposits on
Buy a commercial bank
For another
Foreign exchange
Free car prices consider a bowl of noodles
Normally give the direct quote
On the board of noodles
We say that the noodles
Costs
Virginia beach
16 purple weed
You're not used to give the indirect quote
The indirect quote
Quote with the bulls
0.
0
625
5
Korean
We tend to think in
Set the price of currency
In terms of another currency is
Is the direct quote on that currency
The difference with
Conscience however is that one country's direct quote
Is the other countries in direct
Trim a chinese base
The amount of chinese men required to buy
U.s. dollars is the direct quote on us dollars
Show chinese year 6.25
Is the cost of the us dollar to us
From a us dollar basis
Direct quote is us dollars
One six
Per chinese yuan
That's the cost of a chinese yen to dam the foreign exchange market
Is adam i guess the largest market in the world it
It's 24 hour
Over the counter market
Centered on
The uk
Ufc
Singapore japan and hong kong
Can i get an over-the-counter or otc market
I mean that it's not on
Salon at exchange
Such as a stock or bond exchange work
Are commodities
Wholesale market
Minimum quota
Is
U.s. dollars 1 million
The over half of
Trades are electron
That's an increase over the last three years three years ago
Only about a third or electronic
And the market is dominated by banks brokers pension funds insurance companies hedge funds
My data come from the bank for international settlements
Triennial survey this siri was completed in april 2000 and
13
And you can see that
Non-financial participants in the
The market
Only account for about one-tenth the
The market
The rest are banks
And other financial institute
Give me three types of transactions that
Dominate the foreign exchange
Games market
Spot
Forward and swap
Spot transactions
Are the price of foreign exchange contracted now for immediate delivery
Outright forward transactions
Are the price of foreign exchange
Contracted today for
For some delivery
At a specified future time
The foreign exchange swap
Is essentially a derivative
It's a derivative
Which is identical to the simultaneous purchase of foreign exchange spot
And the sale of foreign exchange
It's also identical to
28 landing in one currency
I'm borrowing in the second frenzy
Let's look at the turnover
Are foreign exchange markets i said the largest market in the world
This gives the
Daily turnover
In
Billions of us dollars per day
As you can see the turnover is about 5.32
Billion dollars
Now global gdp is about 75 trillion dollars
To the foreign exchange market
Turns over the world gdp approximately
25 times per year
For once every 14 days
The largest transactions
By volume
Are foreign exchange swaps
Spot transactions
Watch live tv
Blow foreign exchange
Had about 2 trillion
Dollar spree
Today
An outright forwards
Are only about
One third of the amount
680 bill
Currency swaps
Adoptions
Are far less than these three
Transactions
Currency swaps
Account for about 1% of transactions
A currency swap is like a foreign exchange swap
Where foreign exchange swap has only two pairs of payments
One at the beginning and one at the end of the transaction
Currency swaps have multiple pairs of payments
Foreign exchange options
Account for about
6% of the market
Although there are well over a hundred
The world end of the 53 currencies too
Part in the bis survey in april
2002
13
Phone me a few currencies
Dominate
The foreign exchange markets
We'd shown here
The twelve currencies
Each of which account for more than a 1% share
Share of global trade in foreign exchange
Change and the top currency
Ps3
United states dollar
Accounting for 87% of trades
It's followed by the euro accounting for 33% and the japanese yen
Accounting 423
Pacific trades
Chinese yuan accounts for
2% of trades
92 add up these percentages of trades you
You can see the top 12 currencies
Account for 185% of trades the reason why there's more than 100% of trades
Is the h trade has two legs two
Two currencies
If you added up
All of the 53 currencies
Nude end up with
200% of trades the
Committed
41 currencies
Just account for
15% of 2/8
Each foreign exchange transaction
Involves two counterparties
And to central banks
Peach bank receives clearing deposits from one citibank
And give up clearing deposits with the
The other central bank
What is bank shelton have clearing accounts with
2 central banks
The used correspondent banks
Take and receive central bank pay
The course of payments in for an exchange are the
Are the central banks of the appropriate currencies
Central banks are extremely important to buy
Finance
I want to say a few words about them
Although their property coverage
Course on central banking
Or macroeconomics
Money and banking
Central banks
Are banks whose liabilities
Are owned by clearing banks
Constitute the bulk of high-power money or the monetary base
Because clearing banks deposits or the money supply
And because clearing banks
Ford credit
Purposes
Maintain at least some fraction of their own deposits
In the form of highly liquid clearing deposits
Central banks can influence the total money supply by
By issuing and redeeming clearing deposits
The central bank is under the control or guidance of the cat
Definitely
The central bank serves as
As the lender of last resort
Providing liquidity to banks
An allowance solvent banks to make payment
And the central bank oversees the financial system and
And regulates commercial banks
Central bank of the united states is the federal reserve system
The central bank of
Europe
Is the european central bank
And its associated central banks of member countries
And
The central bank of china is the people's bank of china
Christa boulder-sized the roughly the same side the fed has assets of 4.5 trillion.
Dollars
That's 70% law
Larger
The european central bank
What assets of about you
U.s. dollars to .65 trillion
The people's bank of china
Is about
20% larger in
In terms of assets the fed
As of december 31st two
Thousand and
14
5.46 trillion doll
Jurassic competitions however are quite different
People's bank of china's abbott's armenian foreign exchange
European central bank had about 29%
Of its assets in foreign exchange nominated
Assets
The best of its assets are spread between
Clean john banks and sakura
Gerrity's
At the
Had almost all of its assets in
Insecurities
In terms of liabilities there
Your competition is more similar these are they
Dollars
Worthy
Jimmy b
40 year olds that are kept in the wallets of the residents of the country in them
An important part of the liabilities of the three
Are the
Claims of banks on
Weather
Monetary liabilities
Nominees
Claims of banks another monetary liabilities
Are the current posits
Sewage payment is affected
In the us dollar
Year old and the gym in b
Exchange rates are very important
The add complexity and risk of the
I need additional services that banks can provide to companies
The effect the competitiveness of firms
When the currency of your country appreciates real
United countries
Your country's goods prices rise abroad
And foreign goods prices drop in your country
This hurts
T-shirts
It makes me
Catholic missalette
Less competitive
It benefits domestic cats
Tumors
Bandit benefits for
For an asset purchase
In summary for an exchange is the largest and most liquid mark
Market in the world
Foreign exchanges critic
Medical international pigeon
Foreign exchange prices presents risks and opportunities
And analysis of foreign exchange movie
Brings macroeconomics
Into finance