Level: Beginner

Explore this introduction to topics in the foreign currency market such as its participants and motives, products, risks.

Understand how to trade shares of overseas-listed companies in foreign currencies, become aware of settlement concerns and know how exchange rate fluctuations can affect profits and losses when using a cash account or borrowing on margin.

Lesson: #2

FX Rate and Drivers

• Define an exchange rate • Identify different drivers that can affect their values, including country-specific factors such as trade balance, foreign investment, volatility, and fiscal and monetary policies • Explore some of the factors that influence the supply and demand dynamics for a certain country’s currency and that hold sway over its spot rate

Learn how products are comprised of major and minor currency pairs. Understand major trading products such as cash currency, futures and futures options.

Learn to calculate different outcomes on profits, losses and margin loan repayments when trading shares of overseas-listed companies in foreign currencies, including from exchange rate fluctuations and stock price moves.