What is Forex and how does it affect us?

What type are Forex transactions?Although in this market more than half of the transactions are directly bank (transfers or credits via accounts) and there are 30% transactions between financial institutions and banks, there is barely 15% where a bank does not intercede.

Something that shows the importance of these entities and that is born, mainly, that the usual transfer is for the purchase / sale of financial assets.

How is this market born?
This market is born out of necessity and, therefore, is decentralized and it is the central banks of the countries that can really affect them by controlling the money supply, inflation or interest rates.

As is logical, the insolvency risk of the issuing countries is what creates uncertainty in the markets, born of issues such as political uncertainties and general economic factors (evolution of the index of values ​​of a certain country, rumors of its key companies, …).

As I mentioned previously, financial assets are the most common (and most valuable) transfer, among them:

Cash operations of currency (with almost immediate payments, unfortunately the system itself usually does not allow it and takes about two days).
Foreign currency forward transactions (with credit after signing the contract).
Operations with derivatives supported in these currencies (that is, buying, for example, a good whose underlying value is the evolution of the Dollar).
Current currency market
Finally, comment that the simple currency market is becoming more complicated. Before you could easily buy Dollars, change them quickly to Yen, pass them to Dinars and once again become Pesetas have earned money.

Gain that underlies small errors in exchange rates by not reacting fast enough; but unfortunately today, technological media quickly solve these irregularities and it is not possible to earn money this way.

Having said that, I hope I have left this concept of a large-scale market necessary for the current functioning of the scales between the countries a little clearer.

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