Tag Archives: Forex

How To Read Forex Quotes To Calculate The Value Of Your Money Transfer

How To Read Forex Quotes To Calculate The Value Of Your Money Transfer
Making a money transfer does not require deep understanding of Forex trading but it will definitely help you in calculating the approximate cost of your transfer and the amount of money the beneficiary will receive. A few general principles to remember include the following: currencies are always traded in pairs; all quotes contain a pair of three-letter trading symbols of the currencies traded. The first currency symbol is the base or selling currency and the later is the currency that you are buying.

The United States dollar is represented by the abbreviation USD, for instance, while GBP stands for the British pound, JPY is represented by the symbol JPY, EUR stands for the European euro, the Australian dollar is seen as AUD, CHF stands for the Swiss franc, and the Canadian dollar is represented by the symbol CAD, to list only the major currencies. Sometimes you can see a specific graphic symbol depicting a particular currency; the most well known symbols are those of the U.S. dollar, the British pound, the euro and the Japanese yen, despite that other currencies have graphic symbols as well.

No matter what symbols a particular trading platform or chart is using to depict currency pairs and currency rates, you must bear in mind that the first currency in the pair is the one that is more important to you. Imagine you want to send GBP 1,000 to Canada. Therefore, you must buy Canadian dollars to make a money transfer to the recipient. Otherwise, you can send British pounds but one way or another the beneficiary will have to convert your British pounds to Canadian dollars. Such being the case, you must obtain a currency rate chart to calculate the value of the transfer. In any case, you will get a chart that will read something like GBP/CAD 1.63524 or GBP/CAD = 1.63524. In broad terms, this means that right now the British pound is stronger than the Canadian dollar and 1 GBP can buy 1.63524 Canadian dollars. Multiplying the currency exchange rate by the amount of money you plan to transfer i.e. GBP 1,000 x CAD 1.63524 you will obtain a result of 1635.24 Canadian dollars that your pounds will buy.

This is the approximate value of the money transfer after conversion into the recipients currency; however, you have to bear in mind that the actual sum the beneficiary will receive will be of a smaller value due to commissions, fees and all other applicable charges. Moreover, this exchange rate is only for your information; it is obtained online by a reputable money transfer provider but the Forex market is extremely volatile and liquid so the currency rates fluctuate in minutes and the final currency rate you get would be quite different. Nevertheless, it is always a good idea to check the present currency exchange rates. Doing so will allow you to make a more informed decision selecting a money transfer provider by comparing the exchange rates being offered.

Forex Quotes For Website – Accurate Currency Quotes For Forex Traders

Forex Quotes For Website – Accurate Currency Quotes For Forex Traders
Forex Quotes For Website

There are seven major currencies in the modern forex market. Abbreviated with 3 letter codes, the major traded currencies are the; EUR (European Euro), GBP (United Kingdom Pound), USD (US Dollar), AUD (Australian Dollar), JPY (Japanese Yen), CHF (Swiss Franc), and CAD (Canadian Dollar). When these currency quotes are displayed on the forex market, they are expressed in units called currency pairs. The commonly traded pairs, known as the majors, are; EUR/USD, USD/CAD, GBP/USD, USD/JPY, USD/CHF, and AUD/USD.

Currency pairs explained

A currency pair looks something like USD/EUR=0.6871. The first unit, in this case the US Dollar, is called the base currency. It always has a value of one. The second unit, called the quote currency, is the value that changes. The number listed is the amount of the quote currency it would take to buy one unit of base currency. In the example above, one US Dollar could be purchased with 0.6871 Euros. These quotes are the centerpiece which the forex market revolves around. Forex Quotes For Website

Should the currency quote above switch so the Euro were first, the pair would look something like EUR/USD=1.4563, or $ 1.4563 for a single Euro. Getting the pair in the right order is important, otherwise an investor could be in for a shocking financial loss. When the currency quote price rises, it shows that the base is strengthening. A decrease in the quote price shows a weakening currency. Quotes are not absolute. The strength of a currency is relative to another. While the Yen may be weakening to the Euro, it could be strengthening when compared to the Franc. The relativity of money is what makes the forex market so appealing.

When viewing currency quotes, an investor will see two values. They will show the bid price, what the buyer will pay for the base currency, and the ask price, the rate a seller will sell the base. The difference between the bid price and the ask price is called the spread. The spread must be factored into a trade to determine the financial gain or loss of a trade. The bid/ask price will look something like EUR/USD 0.6871 0.6893.

Many factors determine the price of money. The interest rate, inflation, and even the political stability of the issuing countries affect the strength. Government intervention can also affect the values. Flooding the market with currency will lower the price, while buying it up will increase the price. Overall, governments can’t completely control the value of money. The flow of the market will ultimately determine the currency quote values. The dominance of the free market makes investing in forex a fair investment medium. The governments can’t fully influence the market, ruining the trading systems investors have developed to turn profits in the foreign exchange market. Forex Quotes For Website