Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Chapter 6 The Foreign Exchange Market.

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Copyright © 2007 Pearson Addison-Wesley. All rights reserved. Chapter 6 The Foreign Exchange Market

Copyright © 2007 Pearson Addison-Wesley. All rights reserved. 1-2 The Foreign Exchange Market The Foreign Exchange Market provides: –the physical and institutional structure through which the money of one country is exchanged for that of another country; –the determination rate of exchange between currencies, and –is where foreign exchange transactions are physically completed.

Copyright © 2007 Pearson Addison-Wesley. All rights reserved. 1-3 The Foreign Exchange Market Foreign exchange means the money of a foreign country; that is, foreign currency bank balances, banknotes, checks and drafts. A foreign exchange transaction is an agreement between a buyer and a seller that a fixed amount of one currency will be delivered for some other currency at a specified date.

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