Signed in February 1992 and came into force on November 1, 1993, provided for the gradual formation of a monetary and economic union:
The first phase began almost since July 1992 with the withdrawal of all foreign exchange restrictions on the movement of capital within the EU. At this stage, the problem was solved by reducing the rate of inflation and reduce the budget deficit. In September 1993, the share exchange was frozen in ECU at the next level: Germany - 32.6%, France - 19.9%, England - 11.5%.
From January 1994 - provided for the creation of Frankfurt-am-Main European Monetary Institute and the preparation of the creation of the single European currency.
Begins with January 1997, when the EU reached the required level of convergence. In this case, since January 1, 1999 participants in the economic monetary union will become the country's economy which will meet the established criteria.
Maastricht criterion - a criterion that must be satisfied currency to replace it with the euro:
Inflation <3% per year
The national debt <60% of GDP
Discount Rate <max value of one of the three lowest rate + 2%.
In Germany, a very low retirement age, and the Germans are afraid of change marks a cheaper currency - the euro.
SWITZERLAND
Switzerland is not going to join the European Union, thereby emphasizing their independence. The attractiveness of CHF remains high. But there are problems associated with the Nazi gold, which call into question the reputation of the major Swiss banks.
UK
The presence of high interest rates in the UK identifies a large interest in the world of speculators, which affects the economic performance as a whole. England - a recognized global financial center, the main offices of the largest investment giants are located right here in the country operates a very strict laws governing the financial activities of companies, banks and stock exchanges.
Showing posts with label rates. Show all posts
Showing posts with label rates. Show all posts
Saturday, June 1, 2013
Inflation indicators
The Consumer Price Index (Consumer Price Index - CPI) - that's the retail price index.
The index of producer prices (Producer Price Index - PPI) - the index of wholesale prices.
The more of these indices, the more expensive the national currency. Considered acceptable to the growth of these indices to 3% per year.
The monetary aggregates:
M1, M2, M3, M4 - MONEY SUPPLY - monetary support.
M1 - cash in circulation, bank notes and coins;
M2 = M1 + funds for the settlement and current accounts in banks, traveler's checks;
M3 = M2 + time deposits in banks;
M4 = M3 + valuable state documents.
The accelerated growth of the money supply, both in cash and non-cash, provide downward pressure on the currency.
Gross domestic product (Gross Domestic Product - GDP)
The higher the GDP, the better the condition of economy. Optimal change - up to 3% a year, if higher - the reverse reaction. Have to enter the higher rates, which will cause the appreciation of the national currency.
CPI and PPI are considered once a month, M / M.
GDP - Quarterly Q / Q and converted to year Y / Y.
Financial performance report (Treasure Statement)
1. Revenues and expenses of citizens
Personal income (Personal Income)
Feeling the consumer's willingness to spend money (Consumer Sentiment)
2. Construction Spending (Construction Spending)
Start of construction (Hosing Starts)
Appeal at resolving (Building Permits)
New home prices (New Houses Sales)
Current prices (Existing Houses Sales).
The unemployment rate (Unemployment Rate) - is once a month. With increase in national currency depreciates.
Initial jobless claims (Imital Claims).
Ongoing treatment (Continuing Claims).
Increase in these parameters results in a cheaper currency.
Retailing (Retail Sales) - the better the trade, the stronger currency.
Dealer orders durable goods (Durable Goods).
All of this information is Moscow time at 16:30 and 18:30 (Reuters, CQG)
JAPAN
Japan's fiscal year ends on March 31. By the end of the year, as a rule, to take stock of balances transferred to a large amount foreign exchange in the yen, which tends to rise in price. Numerous insurance companies in Japan are the largest players in the market: USD / JPI, USD / DEM, DEM / JPI, CHF / JPI, GBP / JPI. The big problem in Japan is an aging population. Hold on for many years a small interest rate has caused distortion in the banking industry, but, nevertheless, Japan's banks remain the world's major banks. Strengthening South-East economy in the long term will give a chance to the yen to become the main currency for the Asian region.
GERMANY
In Germany a very costly annexation of East Germany (larger transfers from the pension fund, five undeveloped land and unemployment). Under Gorbachev, and later under Yeltsin, Germany issued a lot of credit to Russia ($ 30mlrd), so that any adverse political events in Russia cause a dramatic change in the course of the brand in relation to other currencies. Reports on the state of health of Yeltsin dramatically reduces the cost of DEM versus $.
The index of producer prices (Producer Price Index - PPI) - the index of wholesale prices.
The more of these indices, the more expensive the national currency. Considered acceptable to the growth of these indices to 3% per year.
The monetary aggregates:
M1, M2, M3, M4 - MONEY SUPPLY - monetary support.
M1 - cash in circulation, bank notes and coins;
M2 = M1 + funds for the settlement and current accounts in banks, traveler's checks;
M3 = M2 + time deposits in banks;
M4 = M3 + valuable state documents.
The accelerated growth of the money supply, both in cash and non-cash, provide downward pressure on the currency.
Gross domestic product (Gross Domestic Product - GDP)
The higher the GDP, the better the condition of economy. Optimal change - up to 3% a year, if higher - the reverse reaction. Have to enter the higher rates, which will cause the appreciation of the national currency.
CPI and PPI are considered once a month, M / M.
GDP - Quarterly Q / Q and converted to year Y / Y.
Financial performance report (Treasure Statement)
1. Revenues and expenses of citizens
Personal income (Personal Income)
Feeling the consumer's willingness to spend money (Consumer Sentiment)
2. Construction Spending (Construction Spending)
Start of construction (Hosing Starts)
Appeal at resolving (Building Permits)
New home prices (New Houses Sales)
Current prices (Existing Houses Sales).
The unemployment rate (Unemployment Rate) - is once a month. With increase in national currency depreciates.
Initial jobless claims (Imital Claims).
Ongoing treatment (Continuing Claims).
Increase in these parameters results in a cheaper currency.
Retailing (Retail Sales) - the better the trade, the stronger currency.
Dealer orders durable goods (Durable Goods).
All of this information is Moscow time at 16:30 and 18:30 (Reuters, CQG)
JAPAN
Japan's fiscal year ends on March 31. By the end of the year, as a rule, to take stock of balances transferred to a large amount foreign exchange in the yen, which tends to rise in price. Numerous insurance companies in Japan are the largest players in the market: USD / JPI, USD / DEM, DEM / JPI, CHF / JPI, GBP / JPI. The big problem in Japan is an aging population. Hold on for many years a small interest rate has caused distortion in the banking industry, but, nevertheless, Japan's banks remain the world's major banks. Strengthening South-East economy in the long term will give a chance to the yen to become the main currency for the Asian region.
GERMANY
In Germany a very costly annexation of East Germany (larger transfers from the pension fund, five undeveloped land and unemployment). Under Gorbachev, and later under Yeltsin, Germany issued a lot of credit to Russia ($ 30mlrd), so that any adverse political events in Russia cause a dramatic change in the course of the brand in relation to other currencies. Reports on the state of health of Yeltsin dramatically reduces the cost of DEM versus $.
Friday, May 31, 2013
Exchange Rates Definition
Exchange rate - is the price of the currency of one country expressed in the currency of another country, with sales transactions. Such a price can be established on the basis of supply and demand for a particular currency in the free market, or to be strictly regulated decision of the government or its main financial body, usually the central bank.
Types of exchange rates
Direct quotation - the number of national currency per unit of foreign.
In most countries, foreign currency exchange rates are expressed in national currency. This is the so-called system of direct quotations. For example, in Germany, the U.S. dollar ($) will be equated to a certain amount of DM (DM), and in New York, one German mark will be equal to a certain number of cents (or dollars if the course grade is quite high).
Reciprocal rate - the number of foreign currency per unit of domestic.
Cross Rates
This relationship between the two currencies, which stems from their course in relation to the rate of the third currency. In operations on the world market are often used cross-rate with the U.S. dollar, as the U.S. dollar is not only a major reserve currency, but the currency of the transaction in most foreign exchange transactions.
DEM / CHF, GBP / DEM
All calculations on cross-rates associated dollar, determined by dividing the
DEM / CHF = USD / CHF: USD / DEM
All calculations on cross rates associated with pound sterling, determined by multiplying the
GBP / DEM = GBP / USD USD / DEM
Spot rate
Price of the currency of one country expressed in the currency of another country, established at the time of the transaction, subject to exchange currency counterparty banks on the second business day following the date of the transaction. Spot rate reflects how highly regarded the national currency at the time of surgery outside the country.
FOREX (Foreign Exchange) - the international exchange. The abbreviation FX
USD - U.S. Dollar
Currencies (majors)
EUR = ECU - European Currency international-euro (ECU)
USD - (U.S. Dollar)
GBP = STG (sterling)
CHF = SWF (Swiss franc, swissie)
JPY = YEN (JPY)
The finance ministers of the European Union announced currency conversion rates of 11 countries in the new common currency - the euro.
Starting with 0.00 in the European time 1 January 1999 the euro became the official currency of 11 EU countries, although banknotes and coins in circulation will not appear until 2002.
United Kingdom, Sweden, Denmark and Greece did not participate in the conversion.
The ministers announced the following conversion rates:
DEM - 1.95583
French franc - 6.55957
Italian Lira - 1936.21
The Spanish peseta - 166.386
Portuguese escudo - 200.482
Finnish mark - 5.94573
Irish pound - 0.787564
Belgian / Luxembourg franc - 40.3399
Dutch guilder - 2.20371
Austrian schilling - 13.7603
USD / CHF = 1,7050 / 60
This means that a trader can buy dollars for Swiss francs at the exchange rate of 1.7060, while the dollar sold for Swiss francs at the exchange rate of 1.7050.
1.7050 - bid (bid); 1,7060 - the ask (ask).
Point (point) - this is the minimum price change (pips) - 1,7055 - 5 pips.
Spread (spread) - the difference between the purchase price and the selling price: 1.7060 - 1.7050 = 10 pts points (standard bank spread from 5 to 10 pts).
1,7060 - 1,70 - big figure (big figure).
Hedge (fence) - insurance against currency risks.
Types of exchange rates
Direct quotation - the number of national currency per unit of foreign.
In most countries, foreign currency exchange rates are expressed in national currency. This is the so-called system of direct quotations. For example, in Germany, the U.S. dollar ($) will be equated to a certain amount of DM (DM), and in New York, one German mark will be equal to a certain number of cents (or dollars if the course grade is quite high).
Reciprocal rate - the number of foreign currency per unit of domestic.
Cross Rates
This relationship between the two currencies, which stems from their course in relation to the rate of the third currency. In operations on the world market are often used cross-rate with the U.S. dollar, as the U.S. dollar is not only a major reserve currency, but the currency of the transaction in most foreign exchange transactions.
DEM / CHF, GBP / DEM
All calculations on cross-rates associated dollar, determined by dividing the
DEM / CHF = USD / CHF: USD / DEM
All calculations on cross rates associated with pound sterling, determined by multiplying the
GBP / DEM = GBP / USD USD / DEM
Spot rate
Price of the currency of one country expressed in the currency of another country, established at the time of the transaction, subject to exchange currency counterparty banks on the second business day following the date of the transaction. Spot rate reflects how highly regarded the national currency at the time of surgery outside the country.
FOREX (Foreign Exchange) - the international exchange. The abbreviation FX
USD - U.S. Dollar
Currencies (majors)
EUR = ECU - European Currency international-euro (ECU)
USD - (U.S. Dollar)
GBP = STG (sterling)
CHF = SWF (Swiss franc, swissie)
JPY = YEN (JPY)
The finance ministers of the European Union announced currency conversion rates of 11 countries in the new common currency - the euro.
Starting with 0.00 in the European time 1 January 1999 the euro became the official currency of 11 EU countries, although banknotes and coins in circulation will not appear until 2002.
United Kingdom, Sweden, Denmark and Greece did not participate in the conversion.
The ministers announced the following conversion rates:
DEM - 1.95583
French franc - 6.55957
Italian Lira - 1936.21
The Spanish peseta - 166.386
Portuguese escudo - 200.482
Finnish mark - 5.94573
Irish pound - 0.787564
Belgian / Luxembourg franc - 40.3399
Dutch guilder - 2.20371
Austrian schilling - 13.7603
USD / CHF = 1,7050 / 60
This means that a trader can buy dollars for Swiss francs at the exchange rate of 1.7060, while the dollar sold for Swiss francs at the exchange rate of 1.7050.
1.7050 - bid (bid); 1,7060 - the ask (ask).
Point (point) - this is the minimum price change (pips) - 1,7055 - 5 pips.
Spread (spread) - the difference between the purchase price and the selling price: 1.7060 - 1.7050 = 10 pts points (standard bank spread from 5 to 10 pts).
1,7060 - 1,70 - big figure (big figure).
Hedge (fence) - insurance against currency risks.
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