Posts Tagged ‘Rate’

Moody Stated That Spanish Credit Rate Might Be Down

International rating agencies Moody, AOS International Services yesterday said, could be re-cut the credit rating of Spain. This schedule is based on the severity of the country's refinancing and loan problem next year.

Last September, Moody, AOS lower rating from Aaa to Aa1 Spain. It put pressure on Madrid and the broader euro zone for fear of widespread decline. Moody, AOS states, the ability of Spain to settle the debt is not questioned. Besides that, Matador State also does not require external assistance, such as Ireland and Greece. However, future funding needs, including heavy, so likely will create new tensions in the money market. According to Moody, AOS, another problem related to Spain's rating is likely higher costs of recapitalization of the banking system are estimated to increase the public debt and add to concerns of its citizens. It handles whether the central government to push through reforms, Moody, AOS believe that the weakness of the Spanish warrant puts rating under review for a decline, Äù said Spain's leading analyst Kathrin Muehlbronner in a statement quoted by AFP.

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Why A High Failure Rate In Home Based Business – Network Marketing?

The reason why most people have problems with their network marketing business is because they don't truly understand how the industry works. Often, this is because they were sold a pack of lies from some company that reeled them in on false hopes and promises. Some simply join because they were sold on the idea that they could quit their job and work from home if they just buy a distributorship and call some leads.

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Forex Interest Rate Table – What is Swapped During Forex Swap?

Forex Interest Rate Table

Swap is a forex trading term and it means a real-time purchase and sale of the same amount of a selected currency for two different dates for the sale and purchase of another selected currency. Forex Interest Rate Table

Forex swap is in a way a borrowing mechanism. You basically borrow one currency while lending another for a selected period of time. In other words swap is interest rates for the currency pairs you sell or buy. Depending on the pair, you may either earn or pay swap interests.

Forex swap means that you can buy/sell a base currency today and sell/buy that currency sometime in the future. For example, let's say you bought fixed amount of Euro for Dollars and sold those Euro 3 months afterwards for Dollars. This is defined as Euro Swap.
So, how can forex swap help you profit? Consider an example:

Let's swap US Dollar and Euro. Forex trader enters a swap and buys $100,000 with exchange rate of $0.1 per euro (yeah right! It's just an example!). At the same time, another trader agrees to sell in 3 month the same $100,000 dollars to buy Euros at the exchange rate of $0.09. During this trade the trader makes up to 50,000 euro profit because the value of dollar changed.

In other words, forex swap is when the trader and the broker trade one currency for another at an agreed rate and then convert those selected currencies back at a selected date in the future, at the previously agreed exchange rate. The common forex swap involves the combination of a spot transaction and a forward transaction.

We have already learned that nothing comes cheap and of course there is a cost for forex swap. It is set by the interest rate difference of two selected currencies. The interest rate which you can earn during the swap period is used by the broker to calculate the price of the swap.

The actual calculation of swap cost involves the rate and the adjustment of the interest rate difference between the selected currencies for the amount of swap period. This gives the forex broker both borrowing and lending rates. This doesn't end here. The next step is to the swap points which are either added or subtracted from the price. Forex Interest Rate Table

Currency swap deals with the exchange of interest in one currency for the same interest in another currency. It is referred to as a foreign exchange transaction.

Interest rate swap is an agreement where one stream of interest payments is exchanged for another. In other words, it is the exchange of one set of cash for another based on the interest rate conditions. Interest rate swap is used to manage the exposure to instability in interest rates or to get lower margin interest rates.

What happens if you aren't interested in swap? Most forex brokers provide both swap and swap-free accounts. The Swap-free accounts are designed for forex traders that do not wish to use this option or can not use swap feature due to their religious beliefs. Many forex brokers refer to swap-free accounts as "Islamic accounts".

Using a swap-free forex account allows you roll over the position over night without either gaining or losing any amount. Holding the trading deal for a longer time also assures the trader that only the exchange rate for the set period of time will affect the result of the deal.

How does swap look like? The trading positions which a forex trader leaves open after a certain hour specified by a broker (usually it is after 11:59:59 PM Hamburg time) is subject to a swap debit or credit. Below are examples of how the swap rates might look like.

Currency Pair: EURUSD Long: -0.53 pips Short: -1.52 pips
Currency Pair: EURGBP Long: -1.30 pips Short: -1.79 pips
Currency Pair: USDJPY Long: -0.47 pips Short: -1.59 pips

Don't forget about the weekends. If you roll over the position from Wednesday to Thursday, then the next value date is Monday, meaning the rollover fee indicated as an example in the above table has to be multiplied by 3. Also, it is important to realize that swap rates aren't fixed and updated daily. Forex Interest Rate Table

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