The FX market is the most exciting financial market for traders and also one of the most important markets for those who run our economies. Foreign exchange provides an opportunity for traders and, on the other side, the management of exchange rates is a central part of countries? economic performance. This is even more relevant now than ever before because in recent years the volatility of the FX market has been especially pronounced, which has presented quandaries for investors, companies and governments alike.
Here James Sharpe provides a comprehensive guide to the Forex market and how it is traded. Every important topic from the history of exchange rate systems through to the tools that analysts use to read the market is covered. Sharpe runs through everything from the theoretical to the practical; the theory is explained in early chapters and then later practical chapters 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. Further theoretical underpinnings of the foreign exchange markets follow, with coverage given to the processes that determine exchange rates.
The focus then moves to foreign exchange in practice, the core of the book. Topics covered include: how price quotations are created and presented; cross rates; the range different transactions available and how they are calculated; how foreign exchange exposures are hedged; and how professional traders analyse the market, including a look at technical analysis patterns.
This thorough, technical guide is recommended for those who want to understand more about the commercial realities of currency trading and hedging, and the complete world of foreign exchange.