The Global Currency Exchange Market &
Valuations
Presented By:
Alexis Stocks, Caitlin Caldwell, Hassan Abdellatif, & Carlos Campos
Understanding the Global Currency Exchange
Market: Foreign Exchange Market, Forex, FX
• Buying, Selling, and Exchanging Global Currencies:
o Functions as a decentralized eletronic conversion marketplace of one country's currency into another's:
o Exchange Rates are the Relative Values Between Different Nations' Currencies:
o USD/CAD, EUR/USD, USD/JPY, AUD/USD
• 1 USD = 0.89 EURO, 1 EURO = 1.12 USD
• 1 CAN = 0.74 USD, 1 USD = 1.36 CAN
• 1 USD = 143.94 JPY, 1 JPY = 0.0069 USD
o International Business—Purchasing Materials, Payments/Payroll
o Property Ownership—Buying a home or foreign land
o Investment Speculation—Market Fluctuations, Supply and Demand
o Crucial Role in Supporting International Trade and Investment
• Largest and most liquid financial market in the world by trading volume; operating 24 hours a day, 5 days a
week – with a daily trading volume index surpasing 6 trillion dollars in 2024.
o Managed mostly by banks, brokers, and financial institutions, for the benefit of businesses and individuals.
• Global Marketplace Where the Value of Global Currency Prices are Set and Fluctuate
Valuation Determinants
• A Currency's Relative Value is determined by Market Forces related to:
• Global Trade
• International Investment
• Tourism
• Stock Market
• Inflation, Interest Rates, & Recession
• Geopolitcal Stability & Instability
• Supply & Demand
• Speculation
• 180 Official Currencies, not all Tradable in Forex: Brokers Offer Access to up to 70
Currency Pairs
• Global Hubs exist in Various Timezones:
• Largest Trading Volume Hubs:
o London (38%), New York, Tokoyo, Sydney
o Some Time Periods are more Liquid than Others: 1-5pm UK Time
• Profit and Loss is Determined By Liquid Exchange Rates:
o Cost of Difference in Rate Buy-Sell Spread
Major
Players
• Commercial Banks – (Ex. JP Morgan
Chase, Wells Fargo Bank, PNC Bank, &
Capital One Bank)
• Governments & Central Banks – (Ex.
Federal Reserve, Hong Kong Monetary
Authority, Bank of England, & Reserve
Bank of India)
• Hedge Funds
• Retail Traders
• Brokers – Prime Brokers & Retail
Brokers
Key
Terminology
• Ask & Bid Prices
• Currency Pair – Base
Currency/Quote Currency
(Common Ex. USD/CAD, EUR/USD,
& AUD/USD)
• Hedging
• Inflation Rate
• Exchange Rate
• Bear & Bull Markets
Economic Impact of Global Currency Exchange
• Currency exchange Economic Impacts Include:
rates is one of the
most important Trades
determinants of
economic health Imports
Inflation
Interest Rates
Key Market Index 2023-2024
• Market movers.
• How is everything connected to
money matters?
• What this means for people who
invest?
Regulations:
Regulatory Measures and Their Impact on Economic
Stability:
• Government Imposed Regulations.
• Money Exchange Changes.
• When Things Get Unstable in the Economy
Recent and Future Trends
Recen Economic
Cryptocurrenc
Technology
t
uncertainity advancements
y
Future Geopolitical
shifts
Climate
Change
Regulatory
Changes
Sources!
• https://www.imf.org/en/Publications/GFSR/Issues/2023/04/11/global-financial-stability-report-april-2023
• Wheller, Matt. Who are the biggest players in the forex market. Forex.com. Retrieved September 21, 2024, from
https://www.forex.com/en/news-and-analysis/forex-market-participants/
• Cutkovic, Milan. Foreign exchange market participants: Who controls the forex market?. Axi.com. Retrieved September
21,2024, from https://www.axi.com/int/blog/education/forex/forex-market-participants
• Monexusa.com. Retrieved September 21, 2024, from https://monexusa.com/about-monex-usa/our-tools/glossary/
• Moneycorp.com. Retrieved September 21, 2024, from https
://www.moneycorp.com/en-gb/news-hub/foreign-exchange-glossary/
• Titman, S., Keown, A. J., & Martin, J. D. (2017). Financial Management: Principals & Applications (13th ed.). Pearson.
• Twin, Alexandra. Five Factors that Influence the Exchange Rates. Investopedia.com. Retrieved September 19, 2024, from
https://www.investopedia.com/trading/factors-influence-exchange-rates/
• Mitch, Corey. Forex (FX): Definition, How to Trade Currencies Example. Investopedia.com
Forex (FX): Definition, How to Trade Currencies, and Examples (investopedia.com)
• Montevirgen, Karl. Following the Money Flow, How the Global Currency Market Works. Britannica.com
What Are Exchange Rates? Global Currency Market Explained | Britannica Money ttps://www.investopedia.com/trading/factors-
influence-exchange-rates/ ttps://www.investopedia.com/trading/factors-influence-exchange-rates/
