consider the currency market for british pounds and u.s. dollars. an increase in the supply of british pounds . rev: 05 02 2018 multiple choice results in an appreciation of the pound and a depreciation of the dollar results in a depreciation of the pound and a depreciation of the dollar is equivalent to an increase in the demand for the u.s. dollar is equivalent to a decrease in the demand for the u.s. dollar

Considering the currency market for British pounds and u.s. dollars. an increase in the supply of British pounds results in an appreciation of the pound and a depreciation of the dollar. Hence, option (a) is relevant.

Give a brief account on foreign exchange market.

A global decentralized marketplace for exchanging currencies is the foreign exchange market, also referred to as the currency market or the over-the-counter (OTC) market. This market controls the exchange rates for all currencies. The entire process of buying, selling, and exchanging money at set or current rates is covered. In terms of trade volume, it is the largest market in the world, closely followed by the credit market.

The majority of market participants are the larger international banks. Financial centers act as anchors for trade between a range of various types of buyers and sellers every single hour of the day, with the exception of weekends. Since currencies are constantly exchanged in pairs, the foreign exchange market establishes the relative worth of a currency rather than its absolute value by establishing the market price of one currency when purchased with another. For instance, 1 USD is equal to X CAD, CHF, JPY, etc.

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