Your Questions About Forex Rates

Betty asks…

What is forex exchange rate?

We have an exam tomorrow about exchange rates. I want to know what is forex exchange rate.

kenspong answers:

Forex came from the word Foreign Exchange. Exchange rate is the conversion rate of one currency into another. Exchange rate usually depends on the local demand of the foreign currencies.

Steven asks…

What is the technical background of FOREX?

I’ve read tons of descriptions on the conception of Forex, but none of them provides exact technical details about how it actually works. It drives me nuts.

What is its technical architecture? Is it a computer network? Does it have servers, which evaluate interests and other traffic and serves current exchange rates? How to imagine this? How exchange rates are calculated in every second? What is the input data and where does it come from? What calculates that? A central computer?

A trading interface (web or client program) connects to what servers?

What is the communication scheme of Forex? (In draft)

kenspong answers:

There are different entities in Forex market, different networks and also different rates. Broadly speaking, we can say wholesale and retail market. What rates we see are not the interbank rates for large interbank transactions but the bid and ask rates offered by the market makers.

You may like to refer to for some more ideas. Please note that this site has got nothing to do with the person answering this question i.e. Me :).

Hoe this helps.

James asks…

What interest rates are most applicable to the Forex market?

I was able to find interest rate data on the St. Louis fed web site, but I’m not sure which interest rates affect the forext market. There are treasury bills, CDs, and all other kinds of rates. I figured treasury bill rates are important, but even within that one category there are a bunch of different options like a 3 month bill or a 1 year bill plus many more. What I’m asking is, how do you use the rates on that site? Are there a few significant rates or should you be watching all of them? Please let me know thanks!

kenspong answers:

Hi Dee,

If you are trading the currencies, it is most definitely that you should look over each of the participant country’s interest rate. There are country with low interest rate, there are with high interest rate. You can look and learn about the interest rate data at fxstreet. Here is the URL;

As you can see that currently Australian Dollar has the highest interest rate compare to other major currencies, so, if you, let’s say buy AUDJPY and hold that pair for quite sometimes, you could make quite significant gain just from the currency difference.

Mary asks…

What time can i get fed rates to trade?

I trade the forex market. I have found that trading with fed rates
news is the best way. I watched the fed rate on bloomberg today . At what time is the reports .Month,3months,weeks. Help me

kenspong answers:

Fed announces their decision at 2:15 P.M. Eastern Time

They are most likely going to keep rates where they are till Feb of NEXT YEAR.

FOMC Meetings up to 2009

Aug 5, 2008
Sep 16, 2008
Oct 29, 2008
Dec 16, 2008

Mandy asks…

Do “Foreign” GOLD COINS have 3 values? Do they have EXCHANGE RATES?

Do foreign gold coins (say, Canadian Maple Leafs and other countries gold coins) have 3 values to them? 1) collectors appreciation value and 2) Daily spot/market price of the gold itself and 3) the foreign exchange value. And also, do real gold coins (foreign in this case) fluctuate according to exchange rates (FOREX RATES) . It would seem to me they should have some exchange rate since they could be used as currency if you wanted to. I am not sure. Thanks

kenspong answers:

Yes and no. If it is a coin such as the Canadian maple leaf for example, it has no collector value. It does have a face value of $50 Canadian but it is a one ounce gold coin so the $50 is merely so that it can be considered a Canadian monitary coin, unlike the gold coins the U S produced that had pictures of artists, writers, etc. But had no monitary value stamped on them. They were very unpopular. Some foreign gold coins are collector coins and would have value as such, many times great value to collectors. Most of those such as the old French gold coins are no longer accepted as legal tender because of the reevaluation of French currency into Euros.

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