What is the currency rate?

What is the currency rate?

What is the currency rate:

Also named as Exchange Rates

Currency rate is a term which is simply the price value of the current currency you have compared to the price value of the other currency

For example, when we say that the price of one US dollar is $ 1.11270 Euro, when you buy a Euro currency, here, you sell the dollar you have and Vice versa.

Thus, in order to obtain currency, another currency must be paid for it.

Why do people buy currencies from other countries?

When a dealer from Malaysia, for example, buys goods from Europe, he must pay the goods in a currency acceptable to the European seller. Often, the European seller will not accept the monetary value of a Malaysian Ringgit but wants to get his commodity values in a currency acceptable in most countries of the world such as the US dollar, the euro, the pound sterling or even the Swiss franc.

Here, the Malaysian trader has to replace the Malaysian Ringgit that he owns to buy Euros to send to the European seller for the goods he wants to buy from him by monitoring live currency rate to know the exact current value of desired currency he wants to buy!

Similarly, if a Malaysian tourist wants to travel to a European country for the purpose of tourism, he must buy in his local currency the European currency (euro) to be able to pay goods and services purchased in European territory.

These are the main reasons why a person buys another country's currency.

www.invstoc.com is one of the most comprehensive providers and pays its clients to access to only certified and trusted forex brokers globally with the highest cashback in the world exceed 80% from given high baseline in comparison to all competing cashback providers.

You will first need to register with the cashback brokers. This is free, and no credit card or other financial information needs to be supplied. Once you have registered with INVSTOC you will be able to pick out and connect with forex brokers.

View this video to join the cashback program

Of course, in order to buy something you should know its price.. Similarly, when you want to buy a currency, you must know the monetary value in some other currencies which called currency rate.

What is High and low exchange rates (currency rate)?

And What is Supply and demand theory?

You know that when demand for a commodity increases, its price rises, and when demand drops, its price drops.

When the number of people who want to buy a product exceeds the number of those who want to sell, the product will cost more.

This is called low supply and demand theory.

This law applies to currency rate as applied to anything else.

If the number wanting to buy a currency is greater than the number of sellers, the price of this currency will rise.

If the number of those wishing to sell a currency is more than the number of buyers, the monetary value of this currency will decrease.

For example, if you go to a bank and asked about its cost of replacing the dollar almost against the euro and the result was that the dollar = 1.11270 euros

Here you have to pay 1.11270 euros for $ 1.

But if many people want to buy the euro, the cost will rise to € 1.11300, for example, the greater of people who want to pay the dollar against the euro, the value of the euro against its dollar will increase gradually.

Watch Video 

Major currencies in the currency rate

Every bit, you know, each country possesses its own currency and the international market gives each currency a special symbol known to ease the interaction between traders without mistakes,

For lesson, maybe similar to several countries dealing with the dollar, is the name of the currency of the United States of America and the currency of Australia and the currency of Canada and many nations.

Thus to avoid mistakes in trading, it is internationally agreed that the currency of each nation will be thrown its own symbol known worldwide.

For instance, the US dollar symbol is USD

The Canadian Dollar Symbol is CAD for Canadian Dollar

The Australian Dollar symbol is AUD for Australian dollar

Thus, for each currency a country follows its own symbol.

In principle you can deal and buy the currency of any nation in the world. But trading in the currency market is mainly focused on four currencies:

Euro: The European currency and EUR symbol.

JPY: The Japanese currency and the JPY symbol for the Japanese yen.

GBP: British Pound (GBP) for Great Britain pound.

CHF: Swiss currency and CHF symbol for Franc.

In the currency market, 80% of the trading takes place in the previous four currencies.

But for what?

When you want to buy the yen what you will pay for it

Dealing with previous currencies is all against the US buck.

Remember, currency trading takes place in the form of pairs when you buy a currency, you must sell against it another currency and vice Versa as mentioned before

Continue Reading>>

Ali Syed Arsalan

Accomplished Forex Trader with a Proven 7+ Year Track Record of Success in the Forex Market.

2 年

David, thanks for sharing!

回复

要查看或添加评论,请登录

David Doo的更多文章

  • Avoid Forex Trading Scams

    Avoid Forex Trading Scams

    The foreign exchange (forex) market is huge, with an average daily trading volume of more than $5 trillion, including…

    2 条评论
  • Become a Professional Trader

    Become a Professional Trader

    If you want to become a professional trader, you must learn trading basics and advanced basics. Once these are…

    2 条评论
  • What is Currency trading?

    What is Currency trading?

    Why work in the currency trading market? As you know, there are many types of commodities that can be traded such as…

    1 条评论
  • What's all about Foreign exchange currency rate?

    What's all about Foreign exchange currency rate?

    Concept of Foreign currency Exchange Rate: Foreign currency exchange rate is the price at which one currency can be…

  • Types of international Foreign Exchange Rates

    Types of international Foreign Exchange Rates

    Here we will highlight on the primary types of international change rate governmental system 1. Fixed Exchange Rate…

  • What is margin trading?

    What is margin trading?

    Lets say you are a small trader and you don’t have enough money to buy a car, but you have a good experience in term of…

  • Main 3 principles of forex technical analysis

    Main 3 principles of forex technical analysis

    Technical analysis is the most popular tool used and applicable to stocks, indices, commodities, futures…

  • 4 easy steps to join the highest forex cashback rebate in the world with invstoc

    4 easy steps to join the highest forex cashback rebate in the world with invstoc

    1- Register and login at www.invstoc.

  • What are the key success factors in entering a forex trade?

    What are the key success factors in entering a forex trade?

    Honestly and after a too-long journey (13 years ) in forex trading, I have discovered some important success factors to…

  • What is a Forex Cashback Rebate?

    What is a Forex Cashback Rebate?

    What does forex cashback mean? Forex cashback is a payment rebated to traders for every trade done, Forex Brokers share…

    1 条评论

社区洞察

其他会员也浏览了