Thank you Ms.

Micah Castillion for an enlightening presentation of your product

And welcome mga suki I am now introducing to you our third product, name
foreign exchange market

So before we discuss foreign exchange market, let us first discuss what is

foreign exchange , next slide

Foreign Exchange Market

Foreign exchange, or forex, is the conversion of one country's currency into another.
So meaning to say ito yun alam na naten na conversion of dollar into peso and vise
versa.

-Additionally, In a free economy, a country's currency is valued according to the laws of

supply and demand.

-Because according to economics, When an exchange rate changes, the value of one
currency will go up while the value of the other currency will go down.

So much for that, lets change our topic into the next slide
History of Foreign Exchange

Pano nga ba nagsimula ang foreign exchange market? Actually nagsimula ang
foreign exchange through bartering or exchange of goods or commodities
However from 1876-1913, gold COIN standard WAS used as A BASIS for foreign
exchange TRANSACTIONS

• Gold Standard (1876 to 1913)– in which, Every currency in that period is convertible
into gold and relative conversion rates dictates the exchange rate. It was then
suspended due to World War I.

-meaning countries were only allowed to print currency equal to the amount of their gold
reserves. Gold was the metal of choice due to it being rare, malleable, tough to corrode,
and hard to obtain.

After World War II, Agreements on Fixed Exchange Rates was being established or
also known as the Bretton Woods system

• Agreements on Fixed Exchange Rates –under this period, there is an established

fixed exchange rates between currencies and was in effect from 1944 until 1971.
Governments intervene if exchange rates move 1% higher or lower than the established
level.
In 1973, when the gold standard was completely abolished and the U.S. dollar was no
longer backed by gold reserves, the foreign exchange switched to a free-floating system
or what we called as Floating Exchange Rates.
• Floating Exchange Rates –it is The existing foreign exchange model in which Widely
used currency were permitted to fluctuate based on prevailing market conditions and
restrictions were lifted.

So ditto nman sa period na ito, each country were free to fix to any currency they chose
or to remain unfixed and allow the supply and demand of the currency to determine its
value.
So much for that, next slide pls
Just like other financial transactions, foreign exchange has its own market which
called “forex market”
Foreign exchange market
It is a venue for exchange of various foreign currencies.

Additionally, Foreign exchange markets are made up of banks, forex dealers,

commercial companies, central banks, investment management firms, hedge funds,
retail forex dealers, and investors.

In fact, foreign exchange market was one of the original financial markets formed to
bring structure to the burgeoning global economy. In terms of trading volume, it is, by
far, the largest financial market in the world. Aside from providing a venue for the
buying, selling, exchanging, and speculation of currencies, the forex market also
enables currency conversion for international trade settlements and investments.
--------Continue to next slide-------
So here are the transactions that happens within the foreign market

Foreign Exchange Transactions

• Spot Rate
A forex transaction which signifies immediate exchange and happen in the spot market.

Meaning ito current exchange rate between two currencies. It is the price to be paid
today for immediate settlement in an exchange of two currencies.

• Forward Transactions
An investors may secure an exchange rate (known as forward rate) at which it will sell
or buy currency during a specified time period.
-so here there is facility for the clients to buy or sell currencies at a future date at a
predetermined price

• Currency Futures
Agreement stipulating standard volume of a specific currency that will be exchanged on
a predetermined settlement date and is usually sold in exchanges

Additionally, currency future are futures contracts for currencies that specify
the price of exchanging one currency for another at a future date. The
rate for currency futures contracts is derived from spot rates of the currency
pair.

• Currency Options
An instrument that can be used to buy (call option) or sell (put option) a specific
currency based on the discretion of the holder. When we say Call options it is used to
hedge future payables while put options are used for future receivables.

-moreover, It is a contract giving the option purchaser (the buyer) the

right, to buy or sell a fixed amount of foreign exchange at a fixed price
per unit for a specified time period. Foreign currency options are available
on the Over The Counter markets and on organized exchanges.

-------Lets move on to the next slide pls------

Now lets discuss what is International bonds
An international bond is a debt obligation that is issued in a country by a non-
domestic entity. Generally, it is denominated in the currency of its issuer's native
country. Like other bonds, it pays interest at specific intervals and pays its principal
amount back to bondholder at maturity.
And meron tayong two types of bonds which are foreign bonds and euro bonds
Two types of international bonds
when we say forign bons it is
 Foreign Bonds – it is Bonds issued by a borrower that has different nationality
from the country where bond is issued. It is denominated in the currency of the
country where bond is issued.
Example are bonds issued by issuer with different nationality from united states, japan,
UK, spain and etc.
 Eurobonds – which are Bonds sold in countries other than the nation which uses
the currency.
 -So ito yun mga bond denominated in US dollars issued by a US firm and placed
in European and/or Asian countries.
For example, companies in the US offer dollar bonds which are sold in countries
other than US. Additionally Characteristics of Eurobonds may include its bearer
form, yearly coupon payments and conversion feature.
We are done with internation bonds, next slide pls

What Is the Importance of the Foreign Exchange Market?

Foreign exchange markets serve an important function in society and the global
economy. With that being mentioned, foreign exchange market allow for currency
conversions, facilitating global trade (across borders), which can include investments,
the exchange of goods and services, and financial transactions.

And take note that, without foreign exchange market there will be no forign investor
that will invest to our country.

And that’s the end for my topic, I am now giving the store to present the new
topic to Ms. Jho marzel lazaro. Thank you mga suki.

https://www.investopedia.com/terms/forex/f/foreign-exchange-markets.asp
https://www.investopedia.com/ask/answers/08/what-is-foreign-exchange.asp