These companies show constant demand for foreign currency (as importers) and offer foreign currency (as exporters). Also, they place spare funds on short-term deposit.
At the same time, companies with direct access to the currency market do not, as a rule, effect conversion and deposit operations through commercial banks.
These companies, represented by various international investment funds, operate a portfolio strategy for investment of assets, arranging funds in securities of the Governments of different countries. In dealers’ slang they are referred to as funds, the most well-known of which are G. Soros’ “Quantum”, for successful currency speculations, and “Dean Witter”.
Other types of companies that belong in this category are the great international corporations, creating foreign production investments: the creation of offices, combined business, etc. such as Xerox, Nestle, General Motors, British Petroleum and others.
Central banks
Their main task is currency regulation of their internal market - staving off sudden jumps in rate of a national currency to avoid economical crisis, maintaining a balance of import-export, etc.
Central banks have an influence on the currency market. Their influence could be direct – in the case of currency intervention, or indirect – through regulating the volume of money supply and bank rates.
They are not to be confused with bulls or bears, as their role involves the resolution of international financial issues being faced at a given moment.
A central bank could affect the market independently, to influence its national currency or, in co-ordination with other central banks to arrange a combined currency policy with the international market.
The banks with the most influence on world currency markets are: The United States (the US Federal Reserve or FED), Germany (Deutsche Bundesbank) and Great Britain (the Bank of England, the so-called ‘Old Lady’).
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