Importers, exporters, tourists, and governments buy and sell currencies in the foreign exchange market. For example, when a U.S. trader imports automobiles from Japan, payment will probably be made in Japanese yen. The importer buys yen (through its bank) in the foreign exchange market, much as one buys common stocks on the New York Stock Exchange or pork bellies on the Chicago Mercantile Exchange. However, whereas stock and commodity exchanges have organized trading floors, the foreign exchange market consists of a network of brokers and banks based in New York, London, Tokyo, and other financial centers. Most buy and sell orders are conducted by computer and telephone.5
Current currency futures prices are available directly from the Chicago Mercantile Exchange (CME) on their web site at http://www. cme.com. The quotes are updated every ten minutes throughout the trading session. Updated currency spot and forward rates (from 1 to 12 months) are also provided by the Bank of Montreal Treasury Group at http://www.bmo.com.
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