Forex Quotes Explained
Forex; I am based in the EU and supply a product with $ input raw material and € added value conversion cost..?
which is invoiced in the UK in Sterling. My customer asked me to quote him a price in $ and I translated the final gbp price to $ in a straightforward conversion with the spot rate ($ raw material + € conversion and added value, translated to gbp, then translated to $) My customer however thinks he would get a cheaper price if I took the € conversion added value cost, added it to the $ raw material and quoted starightforward in $. However I look at this I come up with the same price. Can someone please verify that my customer is incorrect and explain the theory behind this?
Now im trying to get my head around what you mean, but as i understand it here i go…
In theory it wont be any different for you because no matter how you convert it, you will still be getting the same amount of money. However for you buyer if the exchange rate is better for $ or Euro or £ (because i cant quite work out which i was for conversion with this) then they will be getting it for a cheaper price.
I hope this helps, as i said from what i can work out, this is what you are getting at.
Martin
Edit – I reviewd my previous answer and reckon this is more what im getting at. Sorry i cant be of greater help.
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