Currency Conversion Rates http://www.theforexnittygritty.com/forex-trading/currency-conversion-rates The Forex market was set up to make sense of and give stability to currency conversion rates. Currency conversion rates are the rates at which the money of one country is exchanged for the money of another country. For example, the current rate of exchange between the US dollar and the Mexican peso is 13.24 pesos to the dollar. As a simple example, you deal with currency conversion rates when you change dollars for pesos, dollars for Yen or British pounds for US dollars at a money changer when you are traveling. But these rates are different from official currency conversion rates. That is because the money changer needs to make a profit and quotes different rates for buying and selling one currency versus another. Currency conversion rates are better when you use your VISA card because the company gets the Forex rate established by daily online currency trading. And, it is the international business community and central banks the set official currency conversion rates with which we are concerned today. Supply and Demand Sets Prices The major Forex markets are London, New York and Tokyo. Because these markets are spaced out around the planet there is active currency trading virtually twenty-four hours a day on each and every business day throughout the year. In Forex markets currency conversion rates are quoted as spot rates which is the current exchange rate and forward exchange rates which is the rate traded today but for delivery at a specified later date. The strength of an economy, interest rates of a country and central bank policy determine the strength of one currency versus another. If interest rates go up in the USA and down in Brazil traders tend to buy US dollars. If US employment numbers falter while Japan’s economy is humming along the dollar tends to fall versus the Yen. Currency conversion rates are largely determined by what traders believe will happen in the near future as market sentiment ebbs and flows. Central Banks, National Economic Policy and Politics Currency conversion rates are not solely determined by economic and interest rate factors. A prime example is the use of currency manipulation by exporting nations to keep their currency cheap in order to sell more products to other nations. Japan has a history of selling products to the USA and then keeping the dollars that they receive as a reserve currency.

1. Currency Conversion
Rates
BY HTTP://WWW.THEFOREXNITTYGRITTY.COM/

2. The Forex market was set up to make sense
of and give stability to currency conversion
rates.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

3. Currency conversion rates are the rates at
which the money of one country is
exchanged for the money of another country.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

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5. For example, the current rate of exchange
between the US dollar and the Mexican peso
is 13.24 pesos to the dollar.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

6. As a simple example, you deal with currency
conversion rates when you change dollars
for pesos, dollars for Yen or British pounds
for US dollars at a money changer when you
are traveling.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

7. But these rates are different from official
currency conversion rates. That is because
the money changer needs to make a profit
and quotes different rates for buying and
selling one currency versus another.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

8. Currency conversion rates are better when
you use your VISA card because the
company gets the Forex rate established by
daily online currency trading.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

9. And, it is the international business
community and central banks the set official
currency conversion rates with which we are
concerned today.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

10. Supply and Demand
Sets Prices
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

11. The major Forex markets are London, New
York and Tokyo.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

12. Because these markets are spaced out
around the planet there is active currency
trading virtually twenty-four hours a day on
each and every business day throughout the
year.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

13. In Forex markets currency conversion rates
are quoted as spot rates which is the current
exchange rate and forward exchange rates
which is the rate traded today but for delivery
at a specified later date.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

14. The strength of an economy, interest rates of
a country and central bank policy determine
the strength of one currency versus another.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

15. If interest rates go up in the USA and down in
Brazil traders tend to buy US dollars.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

16. If US employment numbers falter while
Japan’s economy is humming along the
dollar tends to fall versus the Yen.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

17. Currency conversion rates are largely
determined by what traders believe will
happen in the near future as market
sentiment ebbs and flows.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

18. Central
Banks, National
Economic Policy and
Politics
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

19. Currency conversion rates are not solely
determined by economic and interest rate
factors.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

20. A prime example is the use of currency
manipulation by exporting nations to keep
their currency cheap in order to sell more
products to other nations.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

21. Japan has a history of selling products to the
USA and then keeping the dollars that they
receive as a reserve currency.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

22. They do this rather than converting dollars
received into Yen. This has the effect of
buying dollars with Yen and tends to raise the
value of the dollar and reduce the value of
the Yen.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

23. Taiwan followed suit with this strategy as did
South Korea and eventually China entered
the picture and kept their dollars as profits
and bought US treasury bills to boot.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

24. This sort of currency manipulation stems
from well thought out economic and
monetary policies and has had the effect to
stimulating Asian economies at the expense
of North America and Europe.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

25. Trading currencies takes place for two
reasons.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

26. One is international business such as
described with China, Japan and the rest of
the world.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

27. The other is currency speculation. Trillions of
dollars in currencies are exchanged every
trading day.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

28. This provides a lot of room for speculation on
changes in currency conversion rates and
those who read the signs correctly and trade
accordingly can make a lot of money.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

29. On the other hand those who enter the Forex
markets unawares can experience heavy
losses.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES

30. As always if you choose to trade currencies
do your homework and sit on the sidelines if
things do not make sense.
HTTP://WWW.THEFOREXNITTYGRITTY.COM/FO
REX-TRADING/CURRENCY-CONVERSIONRATES