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Foreign Currency Exchange Rate Article

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The Seven Most Traded Currencies in FOREX.

Currencies are traded in dollar amounts called “lots”. One
lot is equal to $1,000, which controls $100,000 in currency.
This is what is known as the "margin". You can control $100,000
worth of currency for only 1,000 dollars. This is what is called “High Leverage”.

Currencies are always traded in pairs in the FOREX. The
pairs have a unique notation that expresses what currencies
are being traded. The symbol for a currency pair will always
be in the form ABC/DEF. ABC/DEF is not a real currency pair,
it is an example of a symbol for a currency pair. In this
example ABC is the symbol for one countries currency and DEF
is the symbol for another countries currency.

Here are some of the common symbols used in the Forex:

USD - The US Dollar
EUR - The currency of the European Union "EURO"
GBP - The British Pound
JPN - The Japanese Yen
CHF - The Swiss Franc
AUD - The Australian Dollar
CAD - The Canadian Dollar

There are symbols for other currencies as well, but these
are the most commonly traded ones.

A currency can never be traded by itself. So you can not
ever trade a EUR by itself. You always need to compare one
currency with another currency to make a trade possible.

Some of the common PAIRS are:

EUR/USD Euro / US Dollar
"Euro"

USD/JPY US Dollar / Japanese Yen
"Dollar Yen"

GBP/USD British Pound / US Dollar
"Cable"

USD/CAD US Dollar / Canadian Dollar
"Dollar Canada"

AUD/USD Australian Dollar/US Dollar
"Aussie Dollar"

USD/CHF US Dollar / Swiss Franc
"Swissy"

EUR/JPY Euro / Japanese Yen
"Euro Yen"

The listed currency pairs above look like a fraction. The
numerator (top of the fraction or "left" of the / however
you want to SEE it) is called the base currency. The
denominator (bottom of the fraction or "right" of the
/however you want to SEE it) is called the counter currency.
When you place an order to buy the EUR/USD, for instance,
you are actually buying the EUR and selling the USD. If you
were to sell the pair, you would be selling the EUR and
buying the USD. So if you buy or sell a currency PAIR, you
are buying/selling the base currency. You are always doing
the opposite of what you did with to base currency with the
counter currency.

If this seems confusing then you're in luck. You can always
get by with just thinking of the entire pair as one item.
Then you are just buying or selling that one item. Thinking
like this will still enable you to place trades. You only
need to be aware of the base/counter concept for Fundamental
Analysis issues.

So why is it important to know about the base/counter
currency? The base/counter currency concept illustrates
what is actually taking place in a Forex transaction. Some
of you reading this, know that short-selling was restricted
in the stock market *(Short-selling is where you sell a
stock/currency/option/commodity first and then try to buy it
back at a lower price later). But in the FOREX you are
always buying one currency (base) and selling another
(counter). If you sell the pair you are simply flipping
which one you buy and which one you sell. The transaction is
essentially the same. This allows you to short-sell with no
restrictions.

You want to be able to short-sell with no restrictions so
you can make money when the market drops as well as when it
rises. The problem with traditional stock market trading is
that the market has to go up for you to make money. With
FOREX trading you can make money in all directions.

http://www.1-forex.com

About the Author

FOREX Trader and Freelance writer.

http://www.1-forex.com

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Foreign Currency Exchange Rate News

FOREIGN CURRENCY EXCHANGE RATES AT DOD COMMUNITY BANK

The U.S. Department of Defense's Defense Finance & Accounting Service issued the following press release: The foreign currency exchange rates at DoD (Department of Defense) Community Bank branches differ from rates offered by other financial institutions or published in U.S. or foreign media.

Publication: US Fed News Service, Including US State News

FOREIGN CURRENCY EXCHANGE RATES REDUCE READER'S DIGEST FIRST QUARTER REVENUES AND PROFITS

Company Announces U.S. Workforce Reduction of About 200 People PLEASANTVILLE, N.Y., Nov. 3 /PRNewswire/ -- The Reader's Digest Association, Inc. (NYSE: RDA, RDB) today said that changes in foreign exchange rates caused the company to report revenues below last year and accounted for most of the

Publication: PR Newswire

CENTRAL BANK TO MAKE FLEXIBLE FOREIGN CURRENCY EXCHANGE RATES

Al-Watan newspaper quoted Egyptian Central Bank Comptroller Dr. Mahmud Abu al-'Iyun, who said in mid-February 2003 that the lack of involvement of the Central Bank in foreign currency trading will influence the rate of exchange of the US Dollar. Foreign currency reserves of the Central Bank come to

Publication: Info-Prod Research (Middle East)

EGYPT: CENTRAL BANK TO MAKE FLEXIBLE FOREIGN CURRENCY EXCHANGE RATES.(Brief Article)

Al-Watan newspaper quoted Egyptian Central Bank Comptroller Dr. Mahmud Abu al-'Iyun, who said in mid-February 2003 that the lack of involvement of the Central Bank in foreign currency trading will influence the rate of exchange of the US Dollar. Foreign currency reserves of the Central Bank come to

Publication: IPR Strategic Business Information Database

Foreign currency exchange rates.

Karachi, Sep 23 (PPI): The open market rates for major currencies appreciated due to international market developments. Following were the Khanani and Kalia International foreign currency exchange rates Tuesday morning: US Dollar Rs. 57.97 and Rs. 58.02 for buying and selling respectively. Pound

Publication: PPI - Pakistan Press International