Foreign exchange is the process of converting one nation's currency into another. Based on the concept of free economy it can be said that the value of a country's currency depends upon the factors of supply and demand of goods and services between multiple nations. A nation's currency value also might be fixed by its respective government. However most of the countries try to float their currencies freely against the ones that keep them fixed.
Some significant factors responsible for determining the value of any particular currency are market forces based on trade, geo-political risk, investment, and tourism. Each time a tourist visits a nation, he or she is required to pay for the basic necessities such as for goods and services by utilizing the currency of the host nation. Thus, it is very essential for a tourist to exchange the currency of his or her individual country for gaining the foreign currency. This kind of money exchange can be categorized under the demand factors for a particular currency.
Another significant factor of demand takes place when a foreign company shows interest in involving into business deals with an organization in a specific nation. Generally, the foreign company will be paying the local company in their local currency. Often an investor from one country may desire to invest into another, and that particular investment would also have to be made in the local currency. All such necessities produce a demand for foreign exchange. These are the factors which are responsible for making the foreign exchange markets large. There are some companies that provide travel exchange card for the travelers.
Choosing a reputed financial company offering currency exchange services include the following factors:
1. Competitive exchange rates
2. No additional payments for the travel currency card
3. Purchase and sales of all major currencies
4. Encasement of traveler's cheques without any commission
5. Minimum time to send money abroad. Ideal for last minute emergencies
Why making investment in currency exchange market is beneficial?
1. Such kind of investment involves zero risks: Trading in currencies involves no risks in conversion since currencies are the most liquid form of investment.
2. Accessibility: Foreign trading is open for 24 hours, 5 days a week.
3. No insider trading: Exchange market is an open market where changes in values are decided by market forces and not by a knowledgeable few.
4. No commissions: Here the brokers involved earn by setting a spread instead of a fixed percentage or commission. Involving a broker is of primary importance as he would be the professional who would be having the complete knowledge about the wide array of currencies that are available for trading. His selections should be variable and should include both currencies from developing nations as well as of the more volatile evolving economies.
Ebele Kemery a Portfolio manager has a decade of experience in Finance, Investment Management, Sales, Trading and Commodities. Ms. Ebele Kemery is recognized for development and leadership strengths. She has a Strong analytical approach; full-tuition scholar from top-tier university possessing a Bachelors in Engineering in Electrical Engineering.
For more details please visit: https://medium.com/@ebele_kemery