Abstract

At almost $2 trillion per day in trades, currency markets vitally link the world together. Yet few people understand how they work and why they are prone to instability and bouts of panic. This book takes the reader behind the scenes on a tour of the places, the machines, the circuitry and the people involved in moving world money. This journey begins as a traveler removes foreign currency from an ATM machine in Istanbul. The author guides us from the periphery of the market into its neural centers in financial hubs such as London and New York. Currency traders, market analysts, money managers and payments systems architects show their workplaces and reveal their day-to-day experiences in this unpredictable and rapidly evolving world. The experts interviewed may use unfamiliar terms, but the logical progression of the chapters and participants' stories told in workplace settings bring abstract concepts down to earth. After completing the tour, the reader will have a clear picture of the geographical and structural organization of global currency markets and the people who run them. This vision of a volatile, evolving structure will provide a useful framework for deciphering the complex causes of yet unforeseen financial events.
This is a nontechnical exploration into the mechanics of the foreign exchange market, which Williams (Guilford College) nicely motivates by starting with an ordinary retail transaction--an ATM withdrawal of local currency in a foreign country--and tracing it through the wholesale foreign exchange markets to show what actually happens. In doing so, the author provides an intuitive way to explore the most important and arguably the most efficient market in the world, which makes international trade, investment, and financial transfers possible. Individual chapters deal with the nature of spot and forward foreign exchange transactions; how deals get arranged, consummated, and settled; who the major players are; the nature of trading strategies; the sources of exchange rate volatility; the sources of market shocks; and the comparative roles of the euro and the dollar. The discussion is up-to-date, and the use of dialogue makes the book very accessible to the intelligent but uninformed reader. Summing Up: Highly recommended. General readers; all levels of undergraduates. Ingo Walter, Seymour Milstein Professor of Finance, Corporate Governance and Ethics at the Stern School of Business, New York University 'Currency trade is made accessible through the recounting of a series of personal experiences of the author, and professional encounters ranging from bank managers to backroom traders...endeavours to bring abstract concepts of currency exchange down to earth and portray in simple terms the geographical and structural organisations of global currency.' Oxfam Reviews of Journals 'Ambitious and informative...a colourful history of international finance.' Tribune, November 2006