The Economics of Foreign Exchange
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The foreign currency exchange market is one of the most influential markets in the world today, the New York stock exchange, the Nasdaq and the Tokyo stock exchange the three largest securities markets in the world have a daily trading volume of around 300 billion USD combined… the foreign exchange market has a daily trading volume of around 6.6 trillion dollars per day according to the Bank for International Settlements (which is basically the central bank for central banks). This daily figure is more than the annual GDP of all but two of the largest nations on earth, China and the USA.
Well, in this video I want to explore three things: Why is the foreign exchange market so large and influential? Who actually conducts these trades and how? And while we are at it why is it that the UK pound is so valuable compared to all other currencies?
📚 Want to learn more about foreign exchange? We recommend reading “The Art of Currency Trading: A Professional’s Guide to the Foreign Exchange Market (Wiley Trading)”, by Brent Donnelly 👉 (as an Amazon Associate, we earn from qualifying purchases)
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Sources & Citations –
Kurt Schuler and Andrew Rosenberg, The Bretton Woods Transcripts
Dominguez, K. and Frankel, J.A., 1990. Does foreign exchange intervention work?. Peterson Institute Press: All Books.
Rodrik, D., 2006. The social cost of foreign exchange reserves. International Economic Journal
Cavallino, P., 2019. Capital flows and foreign exchange intervention. American Economic Journal: Macroeconomics, 11
Global imbalances and destabilizing speculation (2007), UNCTAD Trade and development report 2007
RC Smith, I Walter, G DeLong – Global Banking Oxford University Press
Foreign Exchange Control in China: First Edition (Asia Business Law Series Volume 4) Kluwer Law International, 2004
The $4 trillion question: what explains FX growth since the 2007 survey?, the Bank for International Settlements
Music – Beethoven – Moonlight Sonata (Piano Cover)
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