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Forex: The main currency market participants
Commercial banks They spend the bulk of foreign exchange transactions.
In the banks holding accounts of other market participants and carry
with them the necessary conversion and deposit-lending operations.
Bank as it accumulates (through transactions with customers), the
aggregate market demand for currency conversions as well as in drawing /
placing funds in and out with them at other banks. In addition to satisfying clients' requests, banks can operate independently and at their own expense.
In the end, the foreign exchange market is a market of interbank
dealings, and, speaking afterwards about the movement of exchange rates
and interest rates, one should bear in mind the interbank foreign
exchange market.
On world currency markets have the biggest influence major
international banks, the daily volume of transactions of billions
dollars.
That banks such as Deutsche Bank, Barclays Bank, Union Bank of
Switzerland, Citibank, Chase Manhattan Bank, Standard Chartered Bank and
others.
Their main difference is the large volume of transactions that may lead
to significant changes in the quotation or the price of the currency. Usually the big players are divided into bulls and bears.
Bulls - it is market participants who are interested in enhancing the
value of the currency, the bears - that market participants who are
interested in lowering the value of the currency.
Normally, the market is in equilibrium between the bulls and bears, and
the difference between quotations of currencies fluctuates within
fairly narrow limits. However, when bulls or bears are "taking over", quotes, exchange rates are changing quite dramatically and significantly.
Firms that conduct foreign trade transactions
Companies participating in international trade, a stable demand for
foreign currency (in the part of importers) and supply of foreign
currency (exporters), and place and attract free currency balances in
short-term deposits.
At the same time, these organizations direct access to the forex
market, as a rule, do not and spend their conversion and deposit
transactions via commercial banks.
Companies engaged in foreign investment assets (Investment Funds, Money Market Funds, International Corporations)
These companies, represented by various international investment funds,
implement a policy of diversified management of portfolio assets by
placing money in securities of governments and corporations of different
countries.
At the dealership jargon they are called simply fund or funds;
best-known fund "Quantum" George Soros, and it executes successful
exchange speculations, as well as fund "Dean Witter".
Firms of this kind also include major international corporations
engaged in foreign manufacturing investment: the creation of
subsidiaries, joint ventures, etc., such as, for example, Xerox, Nestle,
General Motors, British Petroleum and others.
Central banks
Their main task is to exchange regulations in the foreign market -
namely, the prevention of abrupt jumps of the national currencies in
order to prevent economic crises and maintain the balance of exports and
imports, etc. Central banks have a direct impact on the currency market.
Their influence can be direct - in the form of intervention, and
indirectly - through the regulation of money supply and interest rates. They can not be attributed to the bulls or the bears to as they can play as bullish, and in the fall because of the particular challenges facing them at the moment.
Central Bank can act in the market alone to influence the national
currency, or in concert with other central banks to conduct a joint
monetary policy in the international market or for joint interventions.
The greatest influence on world currency markets were: the U.S. central
bank - the Federal Reserve System (US Federal Reserve or short FED),
the central bank of Germany - Bundesbank (Deutsche Bundesbank) and the
UK - BoE (Bank of England, also known as the Old Lady).
Currency Exchange
In some countries with transitional economies there are currency
exchanges, whose functions include the exchange rates for businesses and
forming a market exchange rate. The state usually actively regulates the exchange rate, using the compactness of the exchange market.
Foreign exchange brokerage firms Together a buyer and a seller of foreign currency and conduct a conversion between the loan or deposit transactions. For its mediation brokerage firms charge a brokerage fee as a percentage of the transaction.
Individuals
Individuals hold a wide range of non-trade transactions in the foreign
tourism, transfers of salaries, pensions, royalties, buying and selling
foreign currency in cash. And in 1986. with the introduction of margin trading individuals had the opportunity to invest spare cash in the FOREX market for profit.
Commercial banks