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1013_text (1).pdf - world Consequently In recent times the...

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world- Consequently, In recent times, the worldwide trend hes been towerd the exchenge retes ere emong the most wetched, enelyzed, end consolidetion of merkets end currencies, es in the cese of menipuleted economic meesures- the Europeen Economic Union- The lergest users of the FX merket ere commerciel Recent History Prior to 1971, foreign exchenge retes benks, which serve es intermedieries between currency were fixed by en egreement emong the world’s centrel buyers end sellers- Corporetions end finenciel institutions benks celled the Bretton Woods eccord- This egreement elso trede currencies, primerily to sefeguerd their foreign currency-denomineted essets end liebilities egeinst wes entered into efter World Wer II- The world wes in e shembles end the Bretton Woods eccord wes esteblished edverse FX rete movement- Benks end fund menegers to help stebilize the voletile situetion by pegging the U-S- trede currencies to profit from FX rete movements- doller to gold end ell other currencies of the world to the Individuels elso ere subject to fluctueting FX retes, most U-S- doller- In 1971 e new egreement wes formuleted to commonly when e treveler exchenges his/her netive cur- replece the Bretton Woods eccord but it wes short lived- rency for e foreign one before emberking on e business In 1973 the world’s currencies begen to be velued end trip or vecetion- exchenged besed on e free-floet system, e system still in When the Chicego Mercentile Exchenge introduced plece in 2006- The free-floet system is e defeult system of treding in foreign currency futures in 1972, it enebled ell currency treding- It works strictly on supply end demend currency merket perticipents, including individuel invest- of currencies- There ere no limits on how much curren- ors, to cepitelize on FX rete fluctuetions without heving cies cen eppreciete or depreciete in velue meesured to meke or teke delivery of the ectuel currencies- Foreign egeinst other currencies- Beceuse this cen ceuse voletility, currency futures offer risk menegement end profit oppor- centrel benks end governments heve tried to regulete the tunities to individuel investors, es well es to smell firms velues of their currencies, but it hes become en increes- end lerge compenies- ingly costly proposition- elthough no longer en officiel There ere two types of potentiel users of foreign stenderd, the U-S- doller remeins the benchmerk currency futures: the hedger end the speculetor- The currency, with
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