10 Foreign Exchange ‘Must-Knows’ For Interview

1.Every trade involves selling one currency for another. The most traded ‘currency pairs’ are USD/GBP USD/EUR  USD/JPY.

2.The USD/GBP rate is also known as ‘Cable’ i.e. A client would say “Give me a price in 10 Million Cable”.

3.Average daily volumes in the foreign exchange market are USD 5 Trillion.

4.Trades occur over the phone or via electronic trading platforms (software).The most well known are FXall, Thomson Reuters Matching, EBS (Electronic Broking Services), Currenex, HotSpot FX.

5.Most trades are ‘Spot’ trades with exchange of payments (settlement) taking place two days after trade date.

6.Trades that are agreed today and settle in the future e.g.1, 2 or 6 months time are called ‘Forwards’ e.g .”Give me a price in USD/JPY for 4 months settlement”.

7.When any country’s Interest Rates look like they are going up their currency strengthens versus other currencies.

8.When any country is enjoying strong economic growth their currency also strengthens.

9.The Euro (EUR) has therefore weakened considerably against most other currencies over the last few years.

10.A typical FX Trader used to be a London East End ‘Barrow Boy/Cockney; now Graduates are welcome!

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About Paul McCormick

Paul McCormick is the founder of Opening City Doors and is a Financial Market Specialist having worked for several leading Investment Banks and financial technology institutions additionally.He therefore provides a unique insight, and unusually broad perspective, into the opportunities available in London Financial Markets and related sectors and how to launch your career in the ‘City’.