The foreign exchange market is the largest and most liquid financial
market in the world. In recent years its volatility has been especially
pronounced, which has posed problems for investors, companies and
governments attempting to manage their economies. The management of
exchange rates has become integral to economic performance and to the
political landscape.
'Foreign Exchange, The Complete Deal', part of Harriman House's Applied
Essentials series, is a comprehensive guide to this broad and exciting
market, and how it is traded. James Sharpe, a foreign exchange
practitioner with more than 30 years' experience, unravels the important
features of the Forex market to give a clear understanding of the issues
and processes involved in foreign exchange transactions.
This book begins with an exploration of the historical and theoretical
background to the markets as they exist today. The transition from a
fixed exchange rate system to a floating system is examined and insight
is given on the processes that determine exchange rates and how the
system employed impacts government policy. There is also a detailed
section about the influence interventions by central banks have on the
market.
The focus then moves to foreign exchange in practice, the core of the
book. Topics covered include:
- The range of foreign exchange transactions available - including
spot, forward, broken date, non-deliverable forwards (NDFs), swaps and
options - and how they can be used, with clear worked examples
- How foreign exchange prices are quoted; bid-offer spreads; pips
- How foreign exposures are hedged
- How banks and dealers cover their exposure in the market and make
profits
- A discussion of tools that are used to analyse the market, including
technical analysis
- Factors that influence foreign exchange prices on a daily basis
including a detailed look at liquidity
- How professional traders analyse markets and provide a blueprint for
professional trading
- How best to choose and manage the relationship with foreign exchange
providers
This is an indispensable guide for those who need to understand more
about the commercial realities of currency trading and hedging,
providing a clear and thorough explanation of the complete world of
foreign exchange.
