Definition of Cross exchange rate?
It%26#039;s simple - when you have rates for two currencies (for euro and british pound for ex.) denominated in one other currency (for example in dollars - EUR/USD and GBP/USD) you can calculate Cross exchange rate for these two currencies (EUR/GBP).
For example if you have rate for EUR/USD 1,5:1
and GBP/USD 2:1
you can calculate cross-exchange rate for Euro denominated in british pounds EUR/GBP 0,75:1
In super-simple mode, it%26#039;s determined by supply and demand. There are currency exchange markets all over the world where financial experts trade one currency for another based on the supplies that the sellers have on hand, and the demand for goods that the buyers want to buy in that currency (usually equities / debt).
For example, here are the bid / ask prices for US dollars against a variety of other currencies:
http://www.fxstreet.com/nou/dolargran.as...
Forex trading is very different from securities trading, though, because everything has to be in relation to everything else. If Currency A = Currency B and Currency B = Currency C, then Currency A must = Currency C at all times. Seems simple in theory but any change in one currency relationship has to be reflected (almost) instantaneously in every other relationship on the board, or else you%26#039;d easily be able to get into a cycle of trading A for B, B for C, and then C for A over and over and making a profit on every cycle.
Well, there is no such thing as ONE fx-rate. Actually what you see listed are prices two parties have agreed to (in the past) based on their respective relative valuation of the currencies.
If the question is how those values are determined, the aswer is porbably nobody really knows. But there are a few basic models that can explain exchange rates and in general they are not too bad at it:
1. (Real) interst rate parity
2. Forward Parity
3. Purchasing Power Parity (-%26gt;Big Mac Index)
All those models rely on the assumption of market efficiency (-%26gt; Efficient Market Hypothesis), specifically they assume that no risk free (excess) profits can be earned in the financial markets (-%26gt;No Arbitrage / %26quot;There is no free lunch in finance).
All those models can easily be looked up in wikipedia.
Cheers,
Alex
With the US spending money like water %26quot;bringing democracy%26quot; to those wonderful thankful Muslims in Iraq and Afghanistan, and getting ready to do the same in Syria and Iran, I should not be at all surprised to see the British pound at $3 before too long.
It does not matter, countries do not stay top dogs for ever.
its almost there isn%26#039;t it?
Sometimes. It was $2.40 for years.
it did, not so long back
If I knew son, I wouldn,t be here but sunning meself in the bahamas with a bunch of bikini clad babes..
Maybe. Winston Churchill wold be spinning in his grave though. The gold standard was over $4.
Gosh I hope not, but it would be lovely to see some of my English friends again!
Keep an eye on things via page below
I need to convert US currency. At present US $ is down. Do you think it will rise, can any one tell me when is good time to convert US dollar.
It appears the dollar will continue to decline in value. The FED has overproduced dollars in the past and is now in the process of overproducing dollars again. The FED has lowered critical interest rates once again and as a result will pour more dollars into the hands of people willing to pay the lower interest rates. If I were you, I would get rid of dollars now as the future indicates still more devaluation for the dollar. Good Luck!
It depends on what you need to convert your money into... Euros ? Pesos ? Can$ ? British Pounds ?
It%26#039;s not solely based on how well the $US dollar is doing, so much as how its doing in comparison to the other currency.
I think the dollar is close to bottoming out, but it is still to early to place money on it. I really do not see any major swings in the near future.
http://www.bsp.gov.ph/statistics/keystat...
56pesos
you know how on books they have the price in US $ and the Canadian price is always a couple dollars more...now that the Canadian dollar is worth more than the US dollar, are Canadians getting ripped off on the prices of books by having to pay more?
Mostly we are getting a bad deal on all products, but many retailers are realizing we will just mail order from U.S. - or go south of the border for a shopping trip. So, they all say they are bringing down their prices - some stores offer books at the US price. They all say it takes time and they have old stock at older rates, blah blah.... but believe me, when it is the other way around (Cnd dollar drops much lower than U.S.) - the prices go up pretty darn quick. Wonder why they are not going down very fast? hmmm
Some places (I know Walmart is for sure) are selling books/magazines at the US price. The Canadian prices for this stuff is Crazy!
We are soooo getting ripped off, and in protest, i%26#039;m not buying my magazines elsewhere than Wal Mart. Honestly, so not fair...and stores like Banana Republic, Old navy, H%26amp;M...still have pricetags higher (by 25%) than on US websites...and don%26#039;t even get me started on electronics...and with our sales taxes, it just plain sucks. Feels good to vent!
well if you are asking bout currency exhange rates that is easy
It%26#039;s the state of the country that issues the currency and their ability to pay off loans to the World Bank where 95% of em got their financing to start their country from
You also have to take into effect the goverments outstanding achievement standings vs other nations and their acomplishments/achievements
There are 9 major countries I can think of that set the standard....
I think they are:
The USA
Japan and a few asian nations
Unified Germany
The United Arab Emirates
England and the UK (including Scottland, Ireland, Australia and Canada)
France
Italy
Israel
and last but not least Russia and what was the old Soviet Union prior to the Cold War
Everyone has to pony up and match their achievements to try and set the standard for the rest of world market currency to be measured off of and that figures into exchange rates
Hope that Helped
