This reduces rounding issues and the need to use excessive numbers of decimal places.
There are some exceptions to this rule: for example, the Japanese often quote their currency as the base to other currencies.
Forex contracts involve the right to buy or sell a certain amount of a foreign currency at a fixed price in U. It is extremely rare that individual traders actually see the foreign currency.
In finance, an exchange rate (also known as a foreign-exchange rate, forex rate, ER, FX rate or Agio) between two currencies is the rate at which one currency will be exchanged for another.
It is also regarded as the value of one country’s currency in relation to another currency. For example, an interbank exchange rate of 119 Japanese yen (JPY, ? 119 will be exchanged for each US$1 or that US$1 will be exchanged for each ? In this case it is said that the price of a dollar in relation to yen is ?
The home country is where a company is headquartered.
The firm is likely to be paid or have profits in a different currency and will want to exchange it for its home currency.
This is the exchange rate (expressed as dollars per euro) times the relative price of the two currencies in terms of their ability to purchase units of the market basket (euros per goods unit divided by dollars per goods unit).
If all goods were freely tradable, and foreign and domestic residents purchased identical baskets of goods, purchasing power parity (PPP) would hold for the exchange rate and GDP deflators (price levels) of the two countries, and the real exchange rate would always equal 1.The forward exchange rate refers to an exchange rate that is quoted and traded today but for delivery and payment on a specific future date.In some areas of Europe and in the retail market in the United Kingdom, EUR and GBP are reversed so that GBP is quoted as the fixed currency to the euro.Forex markets are among the most active markets in the world in terms of dollar volume.The participants include large banks, multinational corporations, governments, and speculators.In order to determine which is the fixed currency when neither currency is on the above list (i.e.