Foreign Exchange Theory and Trading Principles

Author: Yang Shenggang
Publisher:
Publish Date: 2002-10-01
Features: Economic globalization is a prominent feature of the international community today, and modern market economy is a global, open economy. The internationalization of economic relations signifies the strengthening and deepening of international division of labor and cooperation, the formation of a global market that transcends national borders and social system differences, the expansion of the space for financial activities, and the gradual formation of a pattern of economic globalization and financial internationalization. Financial internationalization mainly includes the internationalization of financial institutions, financial services, currency, and financial markets. As the scale of international capital flows continues to expand, more countries and regions participate in international financial activities, leading to the gradual establishment of a global, high-speed, systematic, and networked system of capital financing. At the same time, various financial innovation tools, including financial futures, options, and other financial derivatives, are widely promoted globally. This not only brings about the expansion of international credit but also intensifies speculation in the international capital market, thereby giving rise to significant financial risks and the possibility of international financial crises. Since all economic exchanges between countries are related to exchange rates, exchange rate theory and foreign exchange trading have become one of the core contents of international finance. This book is compiled as a teaching material for universities and colleges, divided into 14 chapters, systematically elaborating on foreign exchange theory and financial issues. It places exchange rate theory within the context of a global open economy, studying its evolution and development patterns, exploring the determination of exchange rates and their impact on macroeconomic variables, as well as exchange rate system selection, the use of exchange rate policy tools, and international exchange rate policy coordination. The book incorporates the latest achievements in domestic and international research on exchange rate theory and the latest changes in foreign exchange trading practices in the international financial market. Combining the author's years of teaching experience in international finance-related courses, it adheres to the principles of foresight, scientificity, and practical examples in textbook compilation. Fully considering alignment with international standards, it also takes into account the actual conditions of China's foreign exchange system reform and foreign exchange market opening. The book primarily elaborates on the general theories of exchange rates and their determination, the main methods of foreign exchange trading, risk management in foreign exchange trading, and reforms in foreign exchange management systems, providing a detailed explanation of the fundamental principles of foreign exchange and the practical operations of foreign exchange trading. It is a well-composed textbook.