The rate of exchange is a proportion of currency of one country to the currency of another country. There are a lot of rates of exchange of US dollar. There is the rate of exchange for any other national currency in the spot market and also for various joint currencies or artificial monetary units.

Each such quotation comprises 2 currencies; they are base and quoted currencies. The base currency is usually the first and quoted currency is the second.

To exemplify: in the pair of currencies USD/CHF the US dollar is a base currency, and Swiss franc is a quoted currency.

Every currency has its 3-letter code. For instance, USD is a code for US dollar, EUR is a Euro’s code, CHF is a code of Swiss franc (Confederation Helvetica Franc) and so on. Quotations are expressed in terms of second currency per one unit of the first currency. For instance, quotations USD/CHF (USD-CHF) show how many Swiss francs are given for $1, and quotations GBP/USD (GBP-USD) on the contrary show, how many dollars one should pay for £1.

Quotations, as a rule, are some five-place numbers. For example, USD/JPY = 121.44 means that 1 US dollar was appraised at 121.44 Japanese yen. Logically, the quotation GBP/USD = 1.6262 makes one understand that £1 was appraised at 1.6262 US dollars.

When quotation changes, for example from USD/JPY = 121.44 to USD/JPY = 121.45 or from GBP/USD = 1.6262 to 1.6263 it is said, that the price is changed another point. As it appears from the above, the yen fell in price another point, and the Great Britain Pound rose in price respectively.

Quotations can be direct and indirect:

Direct (European) quotation means, that fixed quantity of a foreign currency is quoted against variable quantity of a national currency. Examples: USD/CHF, USD/JPY, USD/CAD.

Indirect (American) quotation means that fixed quantity of a national currency is quoted against variable quantity of a foreign currency. For example: EUR/USD, GBP/USD, AUD/USD.

As buyers and sellers arrive at a price at the market, state and private market participants arrive at an exchange quotation. Participants of foreign exchange market are groups, which are non-uniform in its structure. Some buyers or sellers can be participants of product market, dealing in stocks or countertrading. Some of them can undertake direct investments in factories and machinery, or portfolio investments, trading with foreign contractors for stocks, obligations and other financial actives; others can work at money-market, being engaged in international bond anticipation note trade. Various investors, hedgers and speculators can appear in the market for any period of time, from several minutes to several years. But, regardless of patterns of ownership, which can be state or private, causes of activity such as investments, hedging, speculation, arbitrage, payment of import or influence on the rate of exchange, they are a part of an aggregated supply and demand of certain currencies and during its coordinated action all of them exert influence on the rate of exchange.

The choice of a foreign currency trading service is not an easy task. And one shouldn’t dash to make a decision on such a service.

It is very important that you follow some general tips – today the web technologies give you a really unique chance to choose what you need at the best terms which are available on the market. Strange, but most of the people don’t use this opportunity. In real life it means that you should use all the tools of today to get any foreign currency trading info that you need.

Search Google or other search engines. Visit social networks and have a look on the accounts that are relevant to your topic. Go to the niche forums and participate in the online discussion. All this will help you to build up a true vision of this market. Thus, giving you a real opportunity to make a wise and nicely balanced decision.

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