Exchange Rates and International Transactions Characteristics of the market The world wide volume of foreign exchange trading is enormous, and it has ballooned in recent years New technologies, such as Internet links, are used among the major foreign exchange trading centers (London, New York, Tokyo, Frankfurt, and Singapore The integration of financial centers implies that there can be no significant arbitrage The process of buying a currency cheap and selling it dear Copyright C 2003 Pearson Education, Inc Slide 13-12Copyright © 2003 Pearson Education, Inc. Slide 13-12 ▪ Characteristics of the Market • The worldwide volume of foreign exchange trading is enormous, and it has ballooned in recent years. • New technologies, such as Internet links, are used among the major foreign exchange trading centers (London, New York, Tokyo, Frankfurt, and Singapore). • The integration of financial centers implies that there can be no significant arbitrage. – The process of buying a currency cheap and selling it dear. Exchange Rates and International Transactions