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Comment on Archive by Forex Investors


 

Comment on Archive by Forex Investors

 

On the spot market, according to the BIS study, the most heavily traded products were: EUR/USD: 28 % USD/JPY: 18 % GBP/USD (also called sterling or cable): 14 % and the US currency was involved in 88.7% of transactions, followed by the euro (37.2%), the yen (20.3%), and the sterling (16.9%) (see table). Note that volume percentages should add up to 200%: 100% for all the sellers and 100% for all the buyers.

Comment on Archive by Forex Investors

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Comment on Archive by Forex Investors

The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank. Several scenarios of this nature were seen in the 1992–93 ERM collapse, and in more recent times in Southeast Asia.


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