tiếng anh tài chính unit 14: THE FOREIGN EXCHANGE MARKET

Vocabulary exercisesI. Match up the half sentences belowTo ‘peg’ a currency againstsomething means to2. A clean floating exchange rate3. Exchange controls used to limit4. Speculators buy or sellcurrencies in order to5. ‘Market forces’ means6. ‘Hedging’ means1.B 2.D 3.A 4.C 5.F 6.EA . The amount of country’s moneythat resident were able to changeinto foreign currencies.B. Fix its value in inlation to it.C. Make a profit by making capitalgains or by investing at higherinterest ratesD. Is determinded by supply anddemand.E. Trying to insure againstunfavorable price movements byway of futures contracts.F. The determination of price bysupply and demand (the quantityavailable and the quantity

Unit 14: The foreign exchange market Group Phạm Ngọc Ánh Trịnh Thanh Hoa Thái Thị Hoàng Yến Phạm Thanh Hoa Lê Đức Dũng Vocabulary Exchange (v) /iks'tʃeinʤ/ To give in return for something receive Exchange (n) /iks'tʃeinʤ/ The act, process Or an instance of exchanging the rate at which the currency unit of one country may be exchange for that of another – Tỷ giá Exchange rate (n) hối đoái Float (v) /fləut/ To find a level in relationship to other currencies solely in response to the law of supply an demand – Thả Intervene (v) /,intə'vi:n/ to take action to affect the market forces of an economy, esp to maintain the stability of a currency – Can thiệp Convert (v) /kən'və:t/: to exchange ( a security or bond ) for something of – Đổi Convertibility (n) /kən,və:tə'biliti/ the quality of being exchangeable (especially the ability to convert a currency into gold or other currencies without restriction ) – chuyển đổi, khả chuyển đổi Equivalent (adj) /i'kwivələnt/ - equal or interchangeable in value, quantity, significance, etc- Tương đương Vocabulary Acquisition (n) /,ækwi'ziʃn/ The act of acquiring / something acquired - giành được, thu Transaction (n) /træn'zækʃn/ the act of transacting or the fact of being transacted : Giao dịch Benefit (n) /'benifit/ something that is advantageous of good – Lợi ích Trade (v) /treid/ to exchange (one thing) for another – Trao đổi Trade (n) /treid/ the buying and selling of goods – Sự trao đổi, thương mại Participate (v) /pɑ:'tisipeit/ to be one of a group of people actively doing st : Tham gia Participant (n) /pɑ:'tisipənt/ a person who participates ( in a particular activity) – người, đối tượng tham gia Quote (v) /kwəut/ to state the current or market price of ( a stock, bond, etc) - Ấn định, xác định Vocabulary exercises I Match up the half- sentences below To ‘peg’ a currency against something means to A clean floating exchange rate Exchange controls used to limit Speculators buy or sell currencies in order to ‘Market forces’ means ‘Hedging’ means 1.B 2.D 3.A 4.C 5.F 6.E A The amount of country’s money that resident were able to change into foreign currencies B Fix its value in inlation to it C Make a profit by making capital gains or by investing at higher interest rates D Is determinded by supply and demand E Trying to insure against unfavorable price movements by way of futures contracts F The determination of price by supply and demand (the quantity available and the quantity bought and sold) Vocabulary exercises II Which six of these verbs are defined below ? Abolish adjust appreciate convert diverge Fluctuate To make changes peg to something suspend revalue To change something into something else To end something permanently To end something temporarily To go up or down (in quantity, value, etc.) To move away from what is conidered normal establish I Reading The foreign exchange market is the market in which such national currencies as dollars, pesos deutschemarks, yen, francs, and others are exchanged It is not an organized market with fixed hours and a physical meeting place, such as the New York Stock Exchange or Chicago Board of Trade The foreign exchange market is an over – the – counter market, the primary communication instruments being the telephone and the computer The market has developed rapidly in the past quarter century, and the volume of activity has escalated dramatically in response to the growth in the volume of world trade in goods and services, and especially in response to the expansion of international capital flows – the acquisition of financial and real assets across national borded Total worldwide foreign exchange market transactions in 1996 were approximately $1.2 trillion, or $1,200 billion per day More than 90 percent of these transactions are associated with capital flows Among the most important financial centers are New York, London, Tokyo, Paris, Frankfurt, Hong Kong, and Zurich Among them, London is the world’s largest foreign exchange center Banks here trade almost $200 billion each day in foreign currencies Comprehension questions What is foreign exchange market? The foreign exchange market is the market in which such national currencies are exchanged • Why is foreign exchange market to be an OTC market? Because it is not an organized market with fixed hours and physical meeting place TRANSLATION The foreign exchange market is the market in which such national currencies as dollars, pesos deutschemarks, yen, francs, and others are exchanged It is not an organized market with fixed hours and a physical meeting place, such as the New York Stock Exchange or Chicago Board of Trade The foreign exchange market is an over – the – counter market, the primary communication instruments being the telephone and the computer The market has developed response to the growth in the volume of world trade in goods and services, and especially in response to the expansion of international capital flows – the acquisition of financial and real assets across national borders Thị trường ngoại hối nơi đơn vị tiền tệ quốc gia đồng Đô-la, Pê-sô, đồng Mác, Yên, Phơ-răng đồng tiền khác giao dịch Đây thị trường tổ chức với thời gian hoạt động địa điểm giao dịch cố định, ví dụ Sở giao dịch chứng khốn New York hay Sàn giao dịch Chicago mà thị trường địa điểm giao dịch, cách thức giao dịch chủ yếu thơng qua điện thoại máy tính Thị trường ngoại hối lên nhanh chóng từ năm 1970, mức độ hoạt động tăng lên cách chóng mặt nhờ vào phát triển không ngừng thương mại quốc tế, đặc biệt mở rộng quy mơ dòng vốn đầu tư quốc tế thơng qua trình thực giao dịch tài sản tài tài sản thực nước ngồi TRANSLATION Total worldwide foreign exchange market transactions in 1996 were approximately $1.2 trillion, or $1,200 billion per day More than 90 percent of these transactions are associated with capital flows Among the most important financial centers are New York, London, Tokyo, Paris, Frankfurt, Hong Kong, and Zurich Among them, London is the world’s largest foreign exchange center Banks here trade almost $200 billion each day in foreign currencies Tổng giao dịch thị trường ngoại hối năm 1996 xấp xỉ 1,2 nghìn tỷ Đơ-la ngày Hơn 90% giao dịch dịch liên quan đến dòng vốn New York, London, Tokyo, Paris, Frankfurt, Hong Kong Zurich trung tâm tài lớn London sàn giao dịch ngoại hối lớn Các ngân hàng thực gần 200 tỷ Đơla giao dịch hối đối ngày London’s trading position arises parlty from the large volume of international financial business generated here – insurance, Eurobonds, shipping, commodities and banking London also benefits from its geographical location which enables it to trade not only with Europe through – out the day but also with the US and the Far East, whereas time difference makes it difficult for those two centers to trade with each other When banks in London begin trading at a.m They can deal with banks in Tokyo, Hong Kong, Singapore whose trading day is just ending From p.m, London banks can trade with banks in New York.: before they close at p.m, their counterparts may be in Los Angeles or San Francisco The foreign exchange market thus trades 24 hours a day The foreign exchange market enables banks and international corporations to trade foreign currencies in large amounts Capital flows arising from trade in goods and service, international investment and loans together create this demand for foreign currency COMPREHENSION QUESTIONS • Why is London the world’s largest foreign exchange market? Because its geographical location enables it to trade with other center based in time differences such as Europe, US, Far East,… Translation London’s trading position aries parlty from the large volume of international financial business generated here – insurance, Eurobonds, shipping, commodities and banking London also benefits from its geographical location which enables it to trade not only with Europe Thị trường London phần nhờ lượng lớn through – out the day but also with the US and the Far East, whereas time giao dịch tài quốc tế thực – bảo hiểm, trái phiếu difference makes it difficult for those two centers to trade with each other đồng Euro, vận chuyển, hàng hóa giao dịch ngân hàng Vị trí địa lý When banks in London begin trading at a.m They can deal with banks thuận lợi mang lại lợi cho London mà cho phép giao dịch in Tokyo, Hong Kong, Singapore whose trading day is just ending From với khối kinh tế châu Âu mà Mỹ khối thị trường Viễn Đông p.m, London banks can trade with banks in New York.: before they mà khác biệt múi gây trở ngại giao dịch close at p.m, their counterparts may be in Los Angeles or San Francisco trung tâm Khi ngân hàng London mở cửa vào sáng, họ thực giao dịch với ngân hàng Tokyo, Hong Kong, Singapore – nơi mà ngày giao dịch chuẩn bị kết thúc Từ chiều, ngân hàng London thực giao dịch với bên New York trước họ đóng cửa lúc chiều, quầy giao dịch tương ứng Los Angeles San Francisco  Translation The foreign exchange market thus trades 24 hours a day The foreign exchange market enables banks and international corporations to trade foreign currencies in large amounts Capital flows arising from trade in goods and service, international investment and loans together create this demand for foreign currency • • Như vậy, thị trường hối đoái hoạt động 24/24 Thị trường hối đoái cho phép ngân hàng tổ chức quốc tế giao dịch tiền tệ với số lượng lớn Nguồn vốn từ hoạt động thương mại như: mua bán hàng hóa & dịch vụ, đầu tư quốc tế cho vay tạo cầu tiền tệ Reading Foreign exchange trading is divided into spot and forward business Generally speaking, spot transactions are undertaken for an actual exchange of currencies (delivery or settlement) two business days later (the value date) Forward transactions involve a delivery date further into the future, possibly as far as a year or more ahead By buying or selling in the forward market a bank can, on its own behalf or that of a customer, protect the value of anticipated flows of foreign currency from exchange rate volatility Comprehension Questions: 4.What are two types of transactions in the foreign exchange market? • • - Spot transaction - Forward transaction What are the differences between spot transaction and forward transactions? • • Spot transactions are undertaken for an actual exchanged of currencies Forward transaction involves a delivery date further into the future By buying or selling currencies in the forward market to protect the value of currencies from exchange rate volatility Translation Foreign exchange trading is divided into spot and forward business Generally speaking, spot transactions are undertaken • Giao dịch ngoại hối chia thành giao dịch hối đoái giao for an actual exchange of currencies (delivery or settlement) two giao dịch hối đối có kỳ hạn Các giao dịch giao business days later (the value date) thực hình thức mua bán ngoại tệ theo tỷ giá giao kết thúc tốn vòng ngày làm Forward transactions involve a delivery date further into việc (Kỳ hạn toán) the future, possibly as far as a year or more ahead By buying or selling in the forward market a bank can, on its own behalf or • Giao dịch hối đối có kỳ hạn tức kỳ hạn toán thời that of a customer, protect the value of anticipated flows of điểm khác tương lai, vòng foreign currency from exchange rate volatility năm.Bằng cách mua bán thị trường giao dịch kỳ hạn, ngân hàng đại diện cho khách hàng, bảo vệ nguồn vốn ngoại tệ tránh biến động tỷ giá hối đoái Broadly speaking, there are three types of participants in the market: customers, such as multinational corporations, are in the market because they require foreign currency in the course of their cross border trade or investment business Some banks participates as market makers; that is their dealers will at any time quote buying and selling rates for currencies – dollars to the pound, deutschemarks to the dollar and so on Other banks or corporations call them ask for their rates, and then buy or sell as the caller choose The dealers earn a profit on the difference between their buying and selling rates, but clearly they have to be ready to change their prices very quickly so that they avoid holding large volumes of a depreciating currency, or being short of a rising currency • The third type of participant, the brokers, acts as intermediaries between the banks They are specialist companies with the telephone lines to the banks throughout the world so that at any time they should know which bank has the highest bid (buying) rate for a currency and which the lowest offer (selling) rate By calling a broker, therefore, it should be possible for banks to find the best dealing rate currently available The broker doesn’t deal on his own account but charges a commission for his services COMPREHENSION QUESTIONS How many types of participants are there? Who are they? There are types: - Customers Market makers Brokers For what purpose multinational corporations need foreign currencies? They are in the market because they need foreign currency for their sea-crossed business COMPREHENSION QUESTIONS • • • • 8.What the terms “bid rates” and “offer rates” mean? Bit rate is buying rate and offer rate is selling rate How brokers participate in the foreign exchange market? They act as intermediaries between the banks – call the bank to know the bid rates and offer rates and then offer banks with their services Translation Broadly speaking, there are three types of participants in the market: customers, such as multinational corporations, are in the market because they require foreign currency in the course of their cross border trade or investment business Some banks participates as market makers; that is their dealers will Nhìn chung, thị trường gồm có bên tham gia: Khách hàng at any time quote buying and selling rates for currencies – dollars to the (VD: tập đoàn đa quốc gia) cần ngoại tệ để giao thương với nước pound, deutschemarks to the dollar and so on Other banks or corporations call Một số ngân hàng tham gia với tư cách nhà tạo lập thị them ask for their rates, and then buy or sell as the caller choose The dealers earn a profit on the difference between their buying and selling rates, but clearly they have to be ready to change their prices very quickly so that they avoid holding large volumes of a depreciating currency, or being short of a rising currency trường; họ tự ấn định giá mua giá bán ngoại tệ - Đô-la sang bảng Anh, Mác sang Đô-la,… Một số tổ chức ngân hàng khác liên lạc với nhóm tạo lập thị trường để biết tỷ giá, sau lệnh mua-bán khớp theo ý muốn Nhóm tạo lập thị trường kiếm lợi nhuận nhờ vào chênh lệch giá mua bán, nhớ họ phải thay đổi giá thật nhanh để tránh trường hợp tỷ giá ngoại tệ đồng loạt xuống có tỷ giá tăng.  Translation The third type of participant, the brokers, acts as intermediaries between the banks They are specialist companies with the telephone lines to the banks throughout the world so that at any time they should know which bank has the highest bid (buying) rate for a currency and which the lowest offer (selling) rate By calling a broker, therefore, it should be possible for banks to find the best dealing rate currently available The broker doesn’t deal on his own account but charges a commission for his services Bên tham gia thứ 3, hay gọi nhà mơi giới, đóng vai trò trung gian ngân hàng Họ chuyên viên công ty làm nhiệm vụ liên lạc với ngân hàng khắp giới qua điện thoại để lúc nắm nơi có tỷ giá mua cao đâu nơi có tỷ giá bán thấp Như vậy, liên lạc với nhà môi giới giúp cho ngân hàng có khả tìm tỷ giá tối ưu có Nhà mơi giới khơng thực giao dịch cho riêng tính phí từ dịch vụ họ cung cấp Summary: • The foreign exchange market is an over-the-counter market in which national currencies are exchanged It trades 24 hours a day throughout many financial centers and among them, London is the world’s largest foreign exchange center thanks to the large volume of international financial business generated here (Eurobonds, insurance, shipping,…) and its geographical location • There are types of transactions in this market: spot business (transactions are undertaken and the value date is within days) and forward business (transactions are undertaken and the value date is from days to a year) • The foreign exchange market is filled with parties: customers (seeking foreign currencies for sea-crossed business), market makers (such banks work as dealers who quote buying, selling rates for currencies and buy or sell as caller chooses) and brokers (offering consulting service related to currency rates) As the globalization process is rapidly promoted, the foreign exchange market is also moving forward with a light-like speed  ... largest foreign exchange center Banks here trade almost $200 billion each day in foreign currencies Comprehension questions What is foreign exchange market? The foreign exchange market is the market. .. such as the New York Stock Exchange or Chicago Board of Trade The foreign exchange market is an over – the – counter market, the primary communication instruments being the telephone and the computer... exchanged • Why is foreign exchange market to be an OTC market? Because it is not an organized market with fixed hours and physical meeting place TRANSLATION The foreign exchange market is the