What is Net Interest Rate Differential? The NIRD is an important factor that affects the value of a currency pair and can have a significant impact on forex trading. When the interest rate of the base currency is higher than that of the quote currency, it creates a positive NIRD, … …
What is Uncovered Interest Arbitrage? Uncovered Interest Arbitrage is a strategy used in forex trading to take advantage of interest rate differentials between two currencies. It involves borrowing money in a currency with a low interest rate and investing it in a currency with a higher interest rate. The goal … …
Temporal Method: Meaning and Examples The temporal method is a technique used in forex trading to account for the translation of foreign currency financial statements into the reporting currency. It is important for multinational companies that have subsidiaries or operations in different countries and deal with multiple currencies. What is … …
Norwegian Krone NOK History The Norwegian Krone (NOK) is the official currency of Norway. It has a rich history that dates back to the 19th century when Norway was under the monetary union with Denmark. In 1875, Norway joined the Scandinavian Monetary Union, along with Denmark and Sweden, and adopted … …
Real-Life Examples of Non-Deliverable Swaps Non-Deliverable Swaps (NDS) are financial derivatives that are used to hedge or speculate on the exchange rate between two currencies. They are particularly useful in situations where the trading of physical currencies is restricted or not feasible. Here are some real-life examples of how NDS … …
Nominal Effective Exchange Rate Definition and Uses The NEER is calculated by taking the weighted average of bilateral exchange rates between the domestic currency and the currencies of the trading partners. The weights used in the calculation are usually based on the country’s trade shares with each trading partner. The … …
Greek Drachma: Everything You Need to Know The Greek Drachma has a long and rich history, dating back to ancient Greece. It was one of the oldest currencies in the world, with its origins dating back to the 7th century BC. Throughout its history, the Drachma went through various changes … …
GBP History and Trading the British Pound Sterling The British Pound Sterling, commonly referred to as GBP, is one of the oldest and most widely traded currencies in the world. It has a rich history dating back several centuries and has played a significant role in global finance and trade. … …
Eurozone: Definition, History, Member Countries Definition The Eurozone is characterized by a single monetary policy, which is set by the ECB, and a common exchange rate regime. It is a unique experiment in monetary integration, as it involves countries with different economic structures and levels of development. History The idea … …
European Currency Unit ECU: What it Means The European Currency Unit (ECU) was a basket currency used by the European Community (EC) member states as a unit of account. It was introduced in 1979 as a precursor to the euro, which replaced it in 1999. The ECU was not a … …
Eurocurrency Market: Definition, History, and Types The Eurocurrency market is a global financial market where banks and corporations can borrow and lend money in currencies other than their domestic currency. It is an important part of the international financial system and plays a crucial role in facilitating global trade and … …
What is a Currency Peg? A currency peg is a monetary policy in which a country’s central bank or government fixes the exchange rate of its currency to that of another currency or a basket of currencies. This means that the value of the pegged currency is maintained at a … …