So just now, price shot up 2 minutes before 14:00 CET, which is I believe the ECB price fix time.
However I don't get the idea behind price fixing and why price can move because of it.
My understanding goes as far as that there are different price fixes throughout the day, by different institutes and that these price fixes are used as a reference price to transact FX with corporate businesses and the like.
What I don't understand is who and why is manipulating the price in order to obtain a certain fix level?
My thought is that if a bank gets a call to transact say 3 bln. euro/dollar on the ECB price fix, this bank will sell e/u (buy dollars) to get in a lower fix and then sell those dollars (buy euro) to the client paying a lower price for the euro then what they sold it for.
But I'm not sure if that's correct and this is one hypothetical participant I'm sure there are more forces in play.
so, I would really like to know more about price fixes, why they are there, how they are used and how different interests manipulate it.
Hope someone can help me out!
However I don't get the idea behind price fixing and why price can move because of it.
My understanding goes as far as that there are different price fixes throughout the day, by different institutes and that these price fixes are used as a reference price to transact FX with corporate businesses and the like.
What I don't understand is who and why is manipulating the price in order to obtain a certain fix level?
My thought is that if a bank gets a call to transact say 3 bln. euro/dollar on the ECB price fix, this bank will sell e/u (buy dollars) to get in a lower fix and then sell those dollars (buy euro) to the client paying a lower price for the euro then what they sold it for.
But I'm not sure if that's correct and this is one hypothetical participant I'm sure there are more forces in play.
so, I would really like to know more about price fixes, why they are there, how they are used and how different interests manipulate it.
Hope someone can help me out!
