The exchange rate or      Prices are determined by a number of factors, including economic and political conditions of the issuing country among the      important. Political stability, inflation and interest rates all influence the price any currency.      On the other hand, governments may seek to control the price of its currency and is flooding the market (to lower prices) or      buying extensively (to raise prices).

However, due to the high volume of FOREX, it is impossible for one influential factor controlling the market in any time. In long market forces dominate, making Forex one of the most open investment opportunities and fair.

Each currency is identified by a three-letter code, which is used in forex exchange

How to Read Currency Quotes

The foreign exchange prices or quotations are given in currency pairs. The first currency is the "base currency" and the second is the "currency listed.

For example, EUR / USD = 1.1882

.... Tells us to buy 1 euro, the cost is U.S. $ 1.182.

For example, if you put a order to buy the EUR / USDYou'd be really buying and selling EUR USD.

If you place an order to sell the pair, you would be selling the EUR and buying the USD. So if you buy or sell a pair of currency, you are buying / selling the base currency.

The best way to remember is to consider the currency pair as one item.

If you buy, you buy the first currency and sell the second. If you sell, you sell the first currency and buy the second. This means that in Forex you can profit in both directions of the market.

Now, if you increase the price of the quote currency means that the base currency is strengthening - a unit of the base currency may buy more of the quote currency. If, however, falls the price of the quote currency, base currency would weaken.

Other examples:

EUR / USD 1.2210/13

a) If you want buy the EUR / USD (ie it would be buying Euros and selling U.S. dollars) you would buy 100,000 euros and selling U.S. $ 122,130, meaning that 122,130 would receive 100,000 Euros U.S. Dollars.

b) For sell the EUR / USD (ie it would be selling euros and buying U.S. dollars) you would be buying $ 122,100 Americans and selling 100,000 euros, would receive 100,000 euros from 122,100 U.S. Dollars.

Since the U.S. dollar is considered the central currency foreign exchange market, where prices are normally currency considered "base." For example, among the "peers Mainly" we USD / JPY, USD / CHF and USD / CAD. For these pairs to many others, quotes are expressed in units of $ 1 USD per the second currency or currency pair.

For example, the quote USD / CHF 1.3000 means that for every U.S. dollar you receive 1.30 Swiss francs, ie you receive 1.30 Swiss francs per $ 1 U.S. dollar.

When the U.S. dollar is the base currency and the price is higher, it means the dollar has appreciated in value and the second currency has weakened. If the price of USD / CHF rises to 1.3050, the dollar is stronger because you can now buy more Swiss francs before.

There are three exceptions to this rule: the Pound Sterling (GBP)The Australian dollar (AUD) and the Euro (EUR). In these cases, the contributions are EURO / USD 1.2090, meaning that for every EURO you receive 1.2090 U.S. dollars Americans.

In these three currency pairs, where the U.S. dollar is the base currency, a rising price would mean a weakening of dollar, as it now takes more U.S. dollars to correspond to one euro, a pound or Australian dollar.

Currency pairs that do not include the U.S. dollar are called Cross currency pairs or, Although the calculation is the same the above. For example, the quotation EUR / JPY 134.50 means that one Euro is equal to 134.50 Japanese yen.

Bid and Ask Price

The contributions are expressed by purchase price (IDB priceor demand) and price sale (ASK priceOr offer price). The purchase price (bid price) Is the price that buyers pay by the base currency (in selling the quote currency), and the selling price (ask price) Is the price that sellers will sell the base currency (in buying the quote currency).

Symbol Bid Ask USD / CAD 1.2392 1.2397

This quote tells us that we can buy one U.S. dollar to $ 1.2397 Canadian, or sell one U.S. dollar to $ 1.2392 Canadians.