30 January Identifying Direct vs. Indirect Currency Quoting Conventions January 30, 2017By FX Initiative FX Market Overview CPE, Currency, Currency Code Locator, Direct, Indirect, ISO 4217, Continuing Professional Education, Convention, Foreign Exchange, Quote, Rates 0 It is evident that no one single world currency exists. There are over 180 currencies recognized as legal tender in circulation throughout the world. The most widely used list of currencies is known as ISO 4217, which is a standard published by the International Organization for Standardization or the ISO. The ISO is an international standard-setting body composed of representatives from various national standards organizations, and the ISO 4217 currency codes shown in FX Initiative’s Currency Code Locator are used in banking and business globally. The ISO 4217 currency codes are also commonly used when publishing exchange rate quotes in newspapers or banks to help delineate the different currencies instead of translating currency names or using ambiguous currency symbols. The most traded pairs of currencies in the world are called “The Majors”, and they include the euro, British pound sterling, Australian dollar, New Zealand dollar, United States dollar, Canadian dollar, Swiss franc, and Japanese yen. While someone new to the foreign exchange market might view published FX quotes similar to a stock or commodity price quotes, it is important to understand that foreign currencies differ because they are quoted in pairs using one of two currency quoting conventions, (1) a direct quote and (2) an indirect quote. A direct quote, also known as an American quote, is the domestic currency per unit of the foreign currency, and an indirect quote, also known as a European quote, is the foreign currency per unit of the domestic currency. Since currencies are always quoted in pairs, a currency quote will contain one currency on the left side of the quote known as the base currency, a forward slash in the center, and the other currency on the right side of the forward slash is known as the terms currency or the counter currency. The base currency is always equal to one unit, and the terms currency represents the number of units that equal one base unit of currency. To illustrate the concept of identifying direct vs. indirect currency quoting conventions visually, the following 6 minute video clip from FX Initiative’s newly released course titled “FX Market Overview” explains how market participants can understand and interpret the two different foreign currency quoting conventions appropriately. Want full access? Click to subscribe today! If you found this information insightful, become a FX Initiative subscriber today and access our complete suite of foreign exchange (FX) continuing professional education (CPE), examples and events at FXCPE.com. Managing FX risk has become a higher priority for many firms for 2017 and it is now easier than ever to learn the fundamentals of currency risk management. Make this the year to reduce FX risk and reap rewards abroad by taking the FX Initiative for your international business today! Click here to subscribe > Cheers to your global organization's continued success in the new year, The FX Initiative Team support@fxinitiative.com Related Posts Clarifying Currency Quoting Conventions Clarifying Currency Quoting Conventions (Video): Distinguish the difference between direct and indirect currency quotations. This video is a preview of FX Initiative’s FX Market Overview course as part of Learning Objective #2. To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com. Start FX Training Clarifying Currency Quoting Conventions Clarifying Currency Quoting Conventions (Video): Distinguish the difference between direct and indirect currency quotations. This video is a preview of FX Initiative’s FX Market Overview course as part of Learning Objective #2. To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com. Start FX Training Clarifying Currency Quoting Conventions Clarifying Currency Quoting Conventions (Video): Distinguish the difference between direct and indirect currency quotations. This video is a preview of FX Initiative’s FX Market Overview course as part of Learning Objective #2. To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com. Start FX Training Clarifying Currency Quoting Conventions Clarifying Currency Quoting Conventions (Video): Distinguish the difference between direct and indirect currency quotations. This video is a preview of FX Initiative’s FX Market Overview course as part of Learning Objective #2. To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com. Start FX Training Clarifying Currency Quoting Conventions (Video) Clarifying Currency Quoting Conventions (Video): Distinguish the difference between direct and indirect currency quotations. This video is a preview of FX Initiative’s FX Market Overview course as part of Learning Objective #2. To learn more, start your FX risk management training today, which provides 24/7 365 access to our complete suite of foreign exchange (FX) continuing professional education (CPE), examples & events at FXCPE.com. Start FX Training Comparing Cryptocurrency to Foreign Currency Cryptocurrencies such as Bitcoin have captured headlines in 2017, and the question of how modern cryptocurrencies compare to traditional foreign currencies is often raised. FX Initiative helps global businesses manage foreign exchange (FX) risk, and this article will explore some of the key differences between cryptocurrency and foreign currency from a corporate foreign exchange risk management perspective. It is clear that cryptocurrencies are still in their infancy, but the debate in the financial community over the future growth of this digital asset class remains open. While many articles have focused on areas such as monetary authorities, regulation, costs, timing, and transparency, this article will offer a unique focus specifically on the areas of acceptance, exchange, utilization, obsolescence, and risk management. Acceptance A small but growing number of brand name companies promote their acceptance of Bitcoin, such as Overstock.com, DISH Network, Expedia, Microsoft, and others. In fact, Coinbase claims that 47,000 businesses integrate Bitcoin with their service. However, companies such as Dell and Fiverr announced their acceptance of Bitcoin in 2014 but have since updated their policies to no longer accept Bitcoin. As ... Comments are closed.