What are hard and soft dollars
Exchange terms for currencies
From the base rate to the hard currency
Currencies play an important role in daily stock exchange trading because currencies are used on a daily basis. Paying as a tourist in a non-currency zone is one example, paying bills is another example and then investing in different currencies in order to make a profit. There are various terms related to currencies, which are also sometimes mentioned in the media and which are relevant for the current trading situation on the stock exchanges, but also in the banks.
Some of the most important terms are summarized on this page.
Appreciation and depreciation
Appreciation is the exact opposite of depreciation. The devaluation reduces the value of the domestic currency, which can stimulate export business. Therefore, the upgrading for export is only partially optimal. In tense economic situations, a decline in exports is to be expected, of course also depending on how shifted the relationship between the domestic and foreign currency is.
Example of an appreciation
Here is a practical example: if the euro is revalued in the euro zone (Germany, Austria, France, etc.), it is worth more than the US dollar. This means that companies in the US have to pay more dollars to buy goods from the euro zone than they did before the appreciation. Conversely, companies in the euro zone pay fewer euros for goods from the USA because these have become cheaper due to the appreciation of the euro.
The revaluation therefore promotes import performance, but slows down exports. However, it always depends on a company's economic relationships to what extent an appreciation really restricts exports. If a company has very good contacts to buyers in the USA, the export quantity will probably only decrease sustainably if the currency difference is very clear and is maintained over a long period of time.
With the revaluation, the sum of money can also be regulated, which is why central banks choose this step in order to regulate company performance and the sum of money, especially with very strong economic performance and export values.
Popular term for the US dollar and just another name for the important currency.
The term hard currency describes a currency of a country or an economic area without any major economic surprises. This means that the currency can maintain its level even if there is a mood of crisis on the stock exchange or in the economy in general - more than that: there is even an appreciation potential against many other currencies, that is, the value of this currency increases in comparison to others.
In addition to the fact that this currency is very stable, it is primarily an issue as a criterion. Because such a currency is often used for currency pairs, i.e. for comparing values with other currencies, and is therefore also a reference. The Swiss franc is considered to be such a hard currency. The opposite of the hard currency is the soft currency.
The US dollar is primarily referred to as the reserve currency because the value of the currency is observed around the world. The US dollar is also often accepted as a means of payment. But the real reason is an economic one in the sense of stock exchange trading, because raw materials such as crude oil (petroleum) are traded with the US dollar, and gold and silver are also settled in US dollars.
The interest is generally the price you get for the money. If there is too much money in circulation, the price, ergo, the interest rate falls. This applies to the interest on the savings account as well as to the key interest rate, with the key interest rate being the starting point and being set by the central banks. In the USA this is a matter for the Fed, in the euro zone the European Central Bank (ECB) and in Switzerland the Swiss National Bank (SNB). The key interest rate is the price that has to be paid in order to be able to borrow money from the central bank, for example a banking institution. The higher the key interest rate, the higher the general interest rates - those for the savings account balance and those for loans. In a strong economic phase, the key interest rates are high worldwide, in a crisis they are low up to almost zero.
Description for comparing the values of two currencies, for example the euro-dollar rate or the dollar-franc rate. As with share prices, a trend (price) is calculated in order to be able to read off the changes. Depending on the respective economic situation, there can be few to very massive differences in values.
The soft currency is the opposite of the hard valuation and has a tendency to devalue in the event of a crisis. This means that the currency is more likely to lose value against a hard currency. That is interesting for speculation, but economically it is less favorable for the affected country or for the affected economic area. The background is usually that the economy has problems and if the economy does not move, the currency tends to depreciate, even more if the economy declines.
- How does life in the hostel change you
- How do liquor stores get their liquor
- How many beats per minute is allegro
- What are the future trends for electricians
- Yoko Ono controlled John Lennon's life
- How do I get a higher mortgage
- Is Singapore politically correct
- Are Indian engineering degrees recognized in Australia
- When does water freeze
- Where have you been in canada
- Why do whites age faster?
- What are back pain types and causes
- India is a secular state
- Was Amir Khusrow Afghan or Turkish
- Why are wedding dresses so heavy
- How can I export my goods?
- AVENGERS ENDGAME SPOILER QUESTION 1
- How do you permanently remove tear bags
- Google forms are anonymous
- How do I find international gemstone buyers
- Are Iranians welcomed in Germany?
- Was there God before the universe began
- What are the moral and immoral acts
- How is McGill University doing