The euro slipped from the level of one-month highs against the dollar after Standard & Poor's said that Greece's debt rollover plan is being considered to put the Greeks to the selective default, although hopes for Greece supported the second bailout.
Foreign Exchange market is commonly known as Forex market that has been established since 1970s. It is successfully recognized as the leader of liquid financial market these days. The transactions compared to the New York Stock Exchange reaches hundreds times bigger. The market is basically selling and buying money freely. It involves buying one currency and selling another.The main currencies in Forex will be US dollars competes with British Pound sterling, Japanese yen, Swiss franc, and Euro. The currencies here are symbolized in three letters, for example USD, GBP, JPY, CHF . The first two letter are indicating the name of the country, and the last letter is indicating the name of the currency.
Many professional Forex traders use the short-term interest rates (set by the countries’ central banks) as one the main factors in the medium- and long-term trading decisions. The currency pairs consist of two currencies and each of them is associated with the FX interest rate set by the central bank of the issuing country (or monetary union for the euro). The higher is the interest rate the more attractive is the currency as the Forex traders may get the leveraged gain on this rate. The lower is the interest rate – the less attractive the currency is for buyers but the more it’s being lent by the traders and investors in order to exchange into higher yielding currencies and assets.