Lesson 4 : Companies (Commercial)

An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade small amounts compared to those of banks or speculators, & their trades often have small short term impact on market rates. Nevertheless, trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when gigantic positions are covered due to exposures that are not widely known by other market participants.