Foreign exchange significado

What is a currency

It is also necessary to differentiate between currency and coin. While the latter refers to the set of metals and paper, which is what is considered cash, the currency refers to the nominative term of the currency of another country. At the end of this article, we will expand on the explanation of the difference between currency and coin.
In a globalized world where there are a multitude of countries and monetary systems carrying out transactions, it is common to find companies and States that have different currencies in order to be able to trade. In the case of Europe, there is a monetary union, that is, a single currency for a group of countries.
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Like the stock market, interest or disinterest in a currency causes it to appreciate or depreciate. If we want to trade with China or have investments in the United States we will have to buy yuan or dollars respectively, and the volume of buying and selling determines the value of one currency with respect to another.

Currency synonyms

A currency is considered a financial asset because it is money from other regions and has a corresponding value. This value is set by an organization (such as the central banks of the countries) or a state, or the value is quoted on the market.
The main currencies used in the world are the US dollar, the euro, the yen, the pound sterling and the Swiss franc. The most important currency is the dollar. In most cases it is used as a reference to mark the value of the other currencies.
Currencies are always fluctuating in the market unless the State is the one who sets their value. There are many factors that influence its value. For example, they depend on the law of supply and demand, as well as inflation, deflation, imports and exports or the political situation of the country. In conclusion, the state of a country’s economy determines whether the value of the currency is good or not. The operation of the foreign exchange market is governed by the Global Foreign Exchange Market Code, which is a set of international guidelines.

Types of currencies

In monetary terms, the aforementioned dollar is considered as fiduciary since its relevance and presence is based on the trust that people, a community, place in it, and this, as we were saying, happens a lot with this currency outside the United States, and in countries where there is no link beyond the diplomatic relations that countries may have with each other.
It should be noted that the imports of goods and services and the investment made abroad will determine the demand for foreign currency; on the other hand, the exports of services and goods and the foreign investment in the area we live in will determine the supply of foreign currency.
On the other hand, we cannot ignore the fact that the entry of foreign currency through the aforementioned export of products or as a result of the influx of tourists is one of the many alternatives that a nation has for its economy to grow considerably and significantly.
In the stock markets, these currencies have an economic value and order of appreciation, which is fluctuating and dependent, of course, on the vicissitudes suffered by their countries of origin in all aspects. Of all the aforementioned currencies, the oldest is the pound sterling.

Currency rae

Thus, for example, bills of exchange or promissory notes issued by non-residents (they are credit instruments), shares, bonds or other financial assets (even if they are issued in foreign currency) are not considered as currencies.
Examples of convertible currencies are: the Euro, the Dollar, the Yen…, which are the ones we will rely on to a large extent. As their price is determined by the market we will be able to access them more easily. An example of a non-convertible currency would be the Nigerian Naira.
Foreign exchange markets are locations where different national currencies (means of payment in general) are exchanged and exchange prices are fixed. The reason for the existence of this type of markets is the exchange operations derived from international trade and movements in the international financial markets.
The price fixed in this type of market is what is known as the exchange rate, i.e. the amount of currency of one country that must be delivered to obtain a certain amount of currency of another country.