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receiving/buying that (base) currency (Always remember that dealer
always buy low and sell high) • the higher rate will always be the dealer’s rate to sell off
/giving always the (base) currency.
• In this way, the dealer will make a profit (the spread). If
the rates were interpreted as the other way around, the
dealer would always make a loss !!
• So beware text or other discussion when the rates are
direct or indirect and/or simply shown together and may
not be in a set order of a dealer’s buy/sell i.e. they may
be shown as sell/buy !!
12 • Pricing/quoting conventions
– The convention in world currency markets is to quote
exchange rates as units of home currency per whole unit
of the foreign currency (most often against US$1). This is
called the direct method. (i.e. home CCY as “money” – split units)
• For example in Europe, the exchange rate between the Euro
and US$ will normally be quoted as t...
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- Fall '13