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Trading Commodities, Commodity Options and Currencies (Collection) by Carley Garner, Paul Brittain

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7. Calculating in Currency Futures

As a reminder, unlike FX pairs in which the Dollar might or might not be the quote currency, currency futures are, for the most part, traded in “American terms.” Using FX lingo, this simply means that the USD is the quote currency and the prices listed in the futures market represent the Dollar price of each foreign currency. This translates into the cost in U.S. Dollars of the foreign currency. In order to understand the point of view of the futures price, ask yourself “How much of our currency does it take to buy one theirs?”

Because currency futures are all (with the exception of the new line of E-micro futures discussed later in the chapter and a handful of less-traded contracts) paired against the U.S. ...

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