FOREX CURRENCY RATE FOR WHOLESALE AND RETAIL TRANSACTIONS

2007-03-08 10:33:40

( Financial )



Foreign exchange market converts the transfer of currency from one country to another. Money being transferred has to be converted from the currency of the country of origin to the currency of the country it is being transferred. This is how forex currency is traded in the financial market.

Forex trading determines the price of forex currency which is crucial in moving funds between and among countries. Changes in the price of forex currency affect household consumers. It affects the cost of goods and services availed by the average household consumers. Weaker price of dollars makes vacationing abroad expensive. Also, it will lead to a decrease in the purchases of foreign goods and services. However, it will lead to an increase in the patronage of domestic goods as well as increase travels within the country.

Forex currency trading is usually done over the country mostly among banking institutions. Buyers and sellers who trade in bulk quantity of forex currencies transact in deposits denominated in foreign currencies. It is less bulky and easier transaction.

Average travelers trade forex currency in the retail market where they can directly exchange currencies in cash. Retail price of forex currency, however, is lower compared to bulk or wholesale transactions. Thus, a traveler will obtain lower amount of the currency he exchanges in the retail market.

Forex rates are published daily in the financial news. Published rates per currency are followed for wholesale transactions done in legitimate financial market. Retail transactions are usually priced lower than the published rates of currencies. Underground market transactions, however, offer higher value of exchange rate for forex currency.

Average traders are advised to deal with legitimate forex dealer to avoid the risk of fraud. It is better to have lower exchange rate for your currency than run the risk of acquiring fake currencies.


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