The place why currencies are traded is the foreign exchange market. Since currencies need to be exchanged in order to facilitate foreign trade and business, the importance of the forex trade. One has to pay a particular country in its currency for a transaction made with that country. For instant, if you are living in the U.S. and want to buy cheese from France, either you or the company that you buy the cheese from has to pay the French for the cheese in euros (EUR). This means that the U.S. importer would have to exchange the equivalent value of U.S. dollars (USD) into euros. The same goes for traveling. A French tourist in Egypt can't pay in euros to see the pyramids because it's not the locally accepted currency. As such, the tourist has to exchange the euros for the local currency, in this case the Egyptian pound, at the current exchange rate.
Why forex trade
0 commentaires:
Enregistrer un commentaire