Why is buying foreign currencies considered investment banking?

Investing money means that an investor arranges his money to preserve and increase his wealth. Since buying foreign currencies can benefit from the fluctuating foreign exchange rates and grow your assets, trading foreign currencies for profit can be considered as investment management.

Fluctuating foreign exchange rates are the basis for buying foreign currency, or participating in the foreign exchange market, and realizing profits. To make a simple analogy, when an investor exchanges US dollars for US dollars at a rate of 1 to 6, and then exchanges the US dollar for US dollars at a rate of 1 to 7, the investor will realize a profit of one yuan for every US dollar, after deducting the relevant handling fees. In other words, the investor is speculating on the difference between the exchange rates based on the inflation or contraction of the currencies of the real countries.

Participation in the foreign exchange market, in addition to direct foreign currency trading, investors can also choose foreign exchange funds, options or futures. Of course, the currency exchange rate certainly will not be according to the investor's idea, in most cases, by the foreign currency of the country's domestic political or economic situation, the market fluctuations are difficult to predict, thus making the foreign exchange investment and finance the risk of relatively high, investors want to profit from it, you must have a certain degree of analytical ability as well as for the exchange of the country's situation of the relevant understanding. And to do a good job of risk control. Investors can choose to participate in the bank or foreign exchange trading platform, but must be formal, to ensure the safety of funds.

However, the foreign exchange market, as a huge financial market, is not susceptible to the impact of investors selling between different currencies. In addition to investors, there are other participants in the main body, such as the countries of the central bank and foreign exchange banks, they play a regulatory role in the foreign exchange market; large international banks are generally for the normal development of cross-border business, but also to serve the demand for transactions in foreign exchange customers, they are also in the foreign exchange market to play an important role. Then there is, is in addition to the individual investor outside of the foreign exchange has a practical need for people, such as traveling or study abroad, this kind of people in the foreign exchange market accounted for a lot.