The word Forex is acronym of Foreign Exchange.
All the countries in the world have their own currencies. Few have common currencies like European Union - Euro. When we exchange (buy) currency of one country by giving (sell) another country currency it is called Foreign Exchange.
How it works?
I'll try to explain with simple example.
If you live in US you pay for your coffee, burger or anything in US Dollar and get back the balance also in same US Dollar. For instance you buy a Double Cheeseburger for $ 5.00 and tender a $ 10 bill, the cashier return back $ 5.00 without any clumsy calculation. Simple ha?
What if you travel to Canada and you buy the same Double Cheeseburger for Canadian $ 5.00 and you tender the cashier 10 Dollar US bill? He have give you the balance in Canadian Dollars and not in US Dollars! Clumsy ha?
This where Foreign Exchange comes into play.
Let us catch up in next post.
All the countries in the world have their own currencies. Few have common currencies like European Union - Euro. When we exchange (buy) currency of one country by giving (sell) another country currency it is called Foreign Exchange.
How it works?
I'll try to explain with simple example.
If you live in US you pay for your coffee, burger or anything in US Dollar and get back the balance also in same US Dollar. For instance you buy a Double Cheeseburger for $ 5.00 and tender a $ 10 bill, the cashier return back $ 5.00 without any clumsy calculation. Simple ha?
What if you travel to Canada and you buy the same Double Cheeseburger for Canadian $ 5.00 and you tender the cashier 10 Dollar US bill? He have give you the balance in Canadian Dollars and not in US Dollars! Clumsy ha?
This where Foreign Exchange comes into play.
Let us catch up in next post.
No comments:
Post a Comment