Concept in Definition ABC

The word foreign exchange corresponds to the plural of the term badge, having its base of debate at the foundations of the economy world.

Economy: foreign currency that is used in a place other than its country of origin

One of the most popular uses of the word is at the behest of the economic field, in which it refers foreign currency, that is, one currency will be all that coin used in a nation or region outside your place of origin. We can cite the most emblematic and common case that is that of the US dollar, the legal tender in the United States and that is undoubtedly the one that usually circulates with the greatest recurrence in other countries outsiders.

The US dollar, the world's currency par excellence

In monetary terms, the aforementioned dollar is considered a fiduciary since its relevance and presence is supported by the confidence that people, a community, deposit in it, and this as we said, happens a lot with this currency outside the States United, and in countries where there is no link beyond diplomatic relations that countries can establish each.

Fiat money does not need the backing of precious metals, like gold. Many Central Banks in the world, especially in the less developed countries, maintain their reserves in this currency, that is, they act as their financial backer; the greater the amount of dollar reserves, the greater confidence the country will awaken both internally and externally.

Exchange rates and the influence on tourism, imports and exports

It is common for currencies to fluctuate and interact with each other within the world money market, therefore, it is that different exchange rates between the various currencies which are modified, raised or lowered, as appropriate, based on economic variables such as What the inflation of the country, economic growth, or consumption internal.

It should be noted that imports of goods and services and investment made abroad will determine the demand for foreign currency, in exchange, exports of services and goods and foreign investment that exists in the area we live in will determine the supply of currency foreign.

On the other hand, we cannot ignore that the entry of foreign currencies through the aforementioned export of products or as a consequence of the tourist influx is one of the many alternatives that a nation has for its economy to grow considerably and importantly.

For example, it is that both tourism and production of various indigenous products and services must have the corresponding promotion and advantages so that those who produce them can export their productions, and on the other hand tourism to approach in order to fill the country with foreign currency of strong weight. This depends yes or yes on good public policies.

The most popular currencies

Among the most common currencies that circulate in the countries are: the aforementioned and famous dollar, the pound sterling, the euro, the Swiss franc, the real, the yen, among others.

In the stock markets these currencies have an economic value and order of appreciation, which is fluctuating and of course dependent on the vicissitudes suffered by their countries of origin throughout appearance. Of all those referred to, the oldest is the pound sterling.

Also, from a currency we can differentiate and establish the country of origin to which the bearer of the currency in question belongs.

External signal that someone or something carries and distinguishes it

Another use of the term allows to name the external sign that someone carries with them, or failing that, that they carry something and that therefore allows us to make a distinction between them belonging to the same category or allows to recognize the belonging of a person to an association or club. “ I recognized your brother because on his sweater he had the school badge.”

Bullfighting: bond with which the bulls of each farmer are distinguished

And in Bullfighting, as the art and technique of fighting bulls is designated, the currency is called loop made up of colored ribbons with which the bulls of each farmer are distinguished in the bullfights. Spain is one of the squares that has excelled in this activity since certainly remote times, where it has been a great show for hundreds of years.

Currency Topics