Foreign Exchange Trading

Without foreign exchange trading, international trade itself could not exist. In former times trade was based on bartering — goods were exchanged for other goods. The introduction of precious metals (i. e. gold and silver) to pay for goods can be considered the forerunner of the foreign exchange market.

The Greeks and Romans commonly used gold as a medium of exchange. Most world trade continued to be based on gold until the nineteenth century. By then industrialization in Western Europe and the United States had boosted world trade to such an extent that gold reserves were no longer adequate to meet the requirements. Governments introduced a par value of their respective local currencies in gold. Thus, the currencies were related to one another through a system called the gold standard. The United States joined this system in 1879. The gold standard system determined the value of all currencies based on gold. This meant the values of different currencies could be compared in terms of one another.

The system worked well until World War I, when trade was interrupted. After the war, currencies fluctuated widely in terms of gold and, thus, in relation to each other. The value of currencies was meant to be regulated by supply and demand (the market mechanism), but speculators often interfered with this mechanism. So in an effort to create more stable exchange markets, some countries, notably the United States, England, and France, returned to the gold standard. Except for a brief period in the early 1930s, the United States stayed on the gold standard. By 1971 it was the only country whose currency remained convertible into gold, and so, by declaring the dollar inconvertible, the gold standard was finally abolished. This meant that holders of United States dollars could no longer exchange their dollars for gold at par value.

In 1944 toward the end of World War II, the Western industrialized nations realized that foreign trade would be necessary to quickly and effectively heal the wounds of war. To create a calm and stable foreign exchange market, the United States government called for a conference in the summer of 1944. It was held in Bretton Woods, New Hampshire. At this conference, both the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development were established.

The Bretton Woods Agreement stipulated that all member countries would express the value of their currencies in gold. However, only the United States dollar was convertible into gold, at the price of $ 35 an ounce.

Central banks of the member countries were required to intervene in the foreign exchange markets to keep the value of their currencies within 1 percent of the par value. This intervention was achieved by actively buying or selling foreign exchange or gold. A given currency could, therefore, never rise above nor fall below fixed points, which are called intervention points. These are the prices beyond which the central bank intervenes. This is called the system of fixed exchange rates.

The system of fixed exchange rates worked well until the late 1960s and early 1970s. At that time a number of countries devalued their currencies. This meant that their currencies were now worth less in terms of gold. England in 1967, France in 1969, and the United States in 1971 and 1973, devalued their currencies. This caused an almost unprecedented turbulence in the foreign exchange markets. In addition, countries such as West Germany and Holland revalued their currencies (increased the par value of their currencies in terms of gold) . Intervention by central banks became very costly. Foreign currency and gold reserves were drained. Countries had to buy their own currency with gold and foreign exchange in order to keep its value above the minimum intervention point, as agreed at Bretton Woods.

It is not surprising, then, that the world saw a return to a floating exchange rate system. Central banks were no longer required to support their own currencies. England, France ( only temporarily ) , Italy, Japan, and the United States all floated their currencies. Western Europe, united in the Common Market, moved to preserve the fixed-rate system but allowed a widening of the intervention points to within 2.25 percent of the par value of the currencies. This system became known as the snake since these currencies move up and down together against currencies outside the snake. The British and the Italians, now members of the Common Market, are expected to eventually join their currencies to the snake.

The foreign exchange market is the mechanism through which foreign currencies are traded. It is not an actual marketplace but a system of telephone and telex communications between banks, customers, and middlemen (foreign exchange brokers, acting for a client vis-a-vis the bank).

Most banks have a special foreign exchange trading department, which consists of foreign exchange dealers and an administrative staff. Customers trade with banks, banks trade among themselves, and brokers often trade on behalf of banks or corporations. Active participants in the foreign exchange market include tourists, investors, exporters and importers, and governments, whose central banks intervene in the markets to minimize fluctuations in their currencies.

The market consists of spot and forward transactions. When a French father transfers money to his son in new York, a typical spot transaction occurs. The French father buys the dollars spot — for immediate delivery — although business practice allows two days for actual delivery. This permits sufficient time to consummate the transaction. The French father, of course, pays for the dollars with his own currency, that is, French francs.

A forward transaction means that delivery of a currency is specified to take place at a future date. Japanese exporters of Toyota care to the United States know from their sales contracts that they will receive a specified United States dollar amount in six months. In order to protect themselves against fluctuating exchange sales, they can sell the dollars forward six months to their bank in Japan in return for yen. Payment and delivery are not required until six months later. The rate of exchange is fixed, however, on the date of the contract. Forward rates are usually quoted on a 30-, 90-, or 180-day basis, but major currencies can have any maturity up to a year and sometimes longer.

Dealers, having concluded a forward contract, should always hedge with an offsetting contract, so as not to leave their position open. For example, if they buy forward thirty days, they should immediately sell forward thirty days for the same amount. Obviously, traders try to realize a profit margin between the two transactions. If dealers do not equalize their position, they are said to speculate. If they buy currency forward without selling forward at the same time, this position is known as long; if they sell a currency forward without buying forward at the same time, this is called short. Such behavior can be disastrous if the exchange rates change rapidly. For instance, suppose that a French company concludes a contract with an American importer, promising to deliver a certain commodity in six months valued at 1,000,000 French francs. At the exchange rate of 22 cents for one franc, the French company expects to receive $ 220,000. If the franc rises to the dollar rate of 23 cents within six months, and the French company does not sell dollars forward, only 956,521.72 francs will be obtained. Since it cost 1,000,000 francs to deliver the original com¬modities, the French company would lose 43,478.28 francs.
Forward rates can be quoted either outright or in terms of a premium or discount on the spot rate. The following table of British pounds shows outright quotations. A bid is the price dealers will pay to acquire pounds. An offer is the price they will sell the pounds for.
 Bid        Offer Offer
One month forward $ 1.7895    $1.7915
Three months forward $ 1.7695    $ 1.7715
Six months forward $ 1.7445    $ 1.7465
Arbitrage is the practice of transferring funds from one currency to an¬other to benefit from rate differentials. For instance, local supply and de¬mand factors may result in a dollar spot rate in London that differs from the rate in New York. If the spot rate is higher in London, and arbitrage dealer would quickly buy dollars with pounds in New York and sell the dollars in London for pounds. Such arbitraging makes sense only if transaction costs (cable, paperwork, etc.) are covered and a small profit is realized. Oppor¬tunities to realize big profits do not exist in this type of arbitraging, since communication systems today make the price, and therefore profit opportu¬nities, available to everyone.
Another form of arbitrage is interest arbitrage. If interest rates in England are 2 percent higher than in the United States money market, a United States investor would do well to change United States dollars into pounds sterling and then invest the sterling at the English interest rate. However, the exchange rate discount of sterling is 1 percent. The investor will have to buy back dollars at a 1 percent premium, thus losing 1 percent. Still, the investor makes an overall gain of 1 percent. Of course, such transactions can only be realized in the absence of foreign exchange regulations, such as capital transfer limitations, which are sometimes imposed by governments. Such restrictions serve to protect a country' s foreign exchange and gold reserves and, therefore, its balance of payments.
The foreign exchange market is an extremely valuable mechanism for world trade. Its main function is to reduce the risk of fluctuating exchange rates or of a change in the parity of currencies (devaluation or revaluation).

外汇买卖

要是没有外汇买卖，国际间的贸易就无法进行。古时，贸易是以货易货的形式，即物物交换。后来采用金银贵金属支付贸易货款，这种办法可视作外汇市场的前身。

古希腊人古罗马人通常用黄金作交换媒介。19世纪前，世界上大多数国家的对外贸易用黄金支付、结算。到19世纪，由于西欧 和美国的工业化进程促进了世界贸易的飞速发展，以致黄金储备 不敷需要。各国政府对本国货币规定了含金量，即规定了黄金平价。于是，各国货币通过称之为金本位的制度，互相联系在一起。 美国是1879年参加金本位制的。金本位制决定了所有以黄金为基 础的货币的价值，这意味着不同货币的价值彼此间可以进行比较了。
金本位制在第一次世界大战前发挥了良好的作用，直到大战 开始国际贸易中断为止。战后，各国货币与金价比，波动的幅度甚大，也就是各国货币之间的比价波幅甚大。货币的价格本应受供 求这一市场机制调节，但是，投机者往往对之干扰。因此，为稳定 外汇市场，有些国家，主要是英、美、法，又恢复实行金本位制。美国除了 30年代初有一段短暂时间外，一直实行金本位制。1971年 前，美国是唯一能把本国货币兑换成黄金的国家；正因为如此，当 美国宣布美元停止兑换黄金后，金本位制从此就消声匿迹，就是说，美元持有者今后再也不能按黄金平价要求把美元换成黄金了。 1944年，正值第二次世界大战即将结束之际，西方工业国就意 识到，为了迅速治愈战争创伤，发展对外贸易势在必行。为了创造一个稳定平静的外汇市场，美国政府倡议于1944年夏召开一次会 议，这次会议在美国新罕布什州的布雷顿森林如期举行。国际货 币基金组织和国际复兴开发银行就是在这次会议上决定成立的。
布雷顿森林会议的协议规定：所有成员国都要用黄金来表示本国货币的价值。但是，只有美元才能按每盎司35美元的价格兑 换成黄金。
协议还要求成员国的中央银行对外汇市场进行干预，确保本国货币的价值维持在黄金平价± 1%的波动幅度内。干预的办法 是积极买卖外汇或黄金。因此，任一特定货币的升幅跌幅不得高 于或低于固定点，这就是所谓干预点，是各国中央银行进行干预的 上下限。这种汇率制度称为固定汇率制。
固定汇率制一直正常运作到60年代末70年代初才发生了变化。当时，有几国对本国货币进行了法定贬值。所谓法定贬值,是 政府宣布货币的金量减少。英国在1967年，法国在1969年，美国 在1971年和1973年分别对本币实行贬值。这一状况在外汇市场 上引起了前所未有的骚动。此外，西德荷兰诸国则对本币升值，也就是宣布提高本币的黄金平价。各国中央银行为了干预外江市场 付出了昂贵的代价，耗尽了本国的黄金外汇储备，因为他们为了使 本币价格不致降到布雷顿森林会议规定的干预点（下限）以下，被迫用黄金外汇买入本币。
在这种情况下，世界各国改而恢复浮动汇率制就不足为怪了。 实行浮动汇率制后，各国中央银行就无需维持本币的汇价了。英、 法、意、日、美等国都实行浮动汇率（法国暂时浮动）。参加共同市场的西欧国家，他们之间仍旧保持固定汇率制，但把干预点（即上下限)扩大到货币平价的±2.25%。这种制度就是众所周知的蛇形浮动制，参加蛇形浮动的国家对集团以外的国家，则实行联合浮动。英国与意大利（共同体成员国）可望最终也参加蛇形浮动。
外汇市场是进行外汇交易的机制或渠道，它不是一个有形市场，而是把银行、客户、中间人（即代表客户向银行买卖外汇的外汇 经纪商)联结在一起的电话、电传通讯网络。
大多数银行设有专门进行外汇交易的部门，由银行的外汇交易员和银行办事员组成。客户与银行间，银行与银行间逬行外汇买卖；外汇经纪商则代表银行或公司承做外汇交易。外汇市场的 积极参与者包括：出国旅游者、对外投资者、进出口商和各国政府； 后者的中央银行为了尽量减低本币波动幅度而干预外汇市场。
外汇市场分现汇交易和期汇交易两种。一个法国人要把钱寄 给在纽约的儿子，此时发生的就是一笔典型的现汇买卖。法国人 买进美元现汇，立时进行交割（尽管按商业惯例，允许其在2天内实际交割，使他有足够时间做成此交易）。当然，法国人是用本币 即法国法郎来购买美元的。
期汇交易是规定在将来某日交割的交易。例如，向美国出售丰田牌轿车的日本出口商，按销售合约的规定，知道在6个月后将 收到一笔一定金额的美元外汇。为了保护自己免受将来出售美元 外汇时汇率可能波动的风险，可事先向日本的银行卖出6个月后 才交割的美元，换回日元。这笔卖出美元、买进日元的远期交易无 需当时交付，而是在6个月后才交付,但是汇价却在签订远期外汇合约之日已经定死。远期外汇买卖有30天期的，90天期的或180 天期的，有些主要货币还可以有1年期的，甚至1年以上期的。
外汇银行在签订这份远期外汇合约后总要再签订另一反向合 约做抵补保值，目的是不让本银行出现敞口头寸。例如，银行买进 -笔30天的远期外汇，就应立即卖出一笔同金额的30天远期外汇。不言而喻，银行想从这两笔交易中赚取利润。外汇银行如果 不轧平头寸，那就是在做投机了。如果买进期汇同时却不卖出期汇，就会出现长余头寸；反之，卖出远期外汇，同时却不买进远期外 汇，就会出现短缺头寸。此时一旦汇价骤然发生变动，后果将不堪 设想。现举例说明之。假设一家法国出口公司与一家美国进口公司签订合约，规定在6个月后出口一笔货，总金额值1百万法国法郎。当汇价是1法国法郎兑换22美分时，法国公司可望到时候收 到220 OOO美元。如果6个月内法郎价格上扬，涨到1法郎兌换23 美分，而该法国公司事先又没有卖出远期美汇，它就只能收到956 521.72法郎。货物原价为1 000 000法郎，此时，法国出口公司就要损失43 478.28法郎Q
远期汇价有两种表示法，一种是直接表示法，另一种是在现汇价的基础上加升水额或减贴水额。下面列举的几个数字是某年某 月某日英镑远期汇价的直接表示法，其中买入价是指银行买进1 英镑付出美元的价格，卖出价是指银行卖出1英镑收进美元的价格。
 买入价       卖出价 卖出价
1月远期 $1.7895       $1.7915
3月远期 $1.7695       $1.7715
6月远期 $1.7445       $ 1.7465
套汇是把资金从一种货币调换成另一种货币以便从两种货币 汇价的差价中牟利的一种活动。譬如，由于当地供求关系的影响， 伦敦的美元汇率与纽约的美元汇率出现了差异。如伦敦的美元汇 率略高，此时套汇者就会赶快在纽约用英镑买进美元，然后在伦敦 卖出美元、买进英镑。这种套汇活动只有在电报费手续费等交易 费用能够补上后并且有微利可赚时才有意义。要想靠套汇赚大钱是不可能的，因为当今世界上的电讯联系十分方便，人人都可以了 解两地的行情，也就是说，人人都能有这种赚钱的机会。
另一种套汇活动是套利。英国货币市场上的利率如比美国货 币市场上的高出2个百分点，此时，美国的投资者就会把美元换成英镑在英国按当地货币巾场上的利率投资；然而，英镑远期汇率的 贴水为1％，所以，美国的投资者将来买回美元时要多付升水额1%，就是说，还要减去1%。就算这样，他还能赚1%。当然，这种套汇活动只有在两地没有外汇管制，没有诸如限制资金调拨的情况下才能做。有些国家的政府有时是有这些限制的，目的是为了 保护本国的外汇黄金储备和维持国际收支的平衡。
外汇市场是世界贸易中非常有价值的机制，其主要功能是减少汇率波动和货币平价变动（即升值、贬值)所产生的风险。