What happens to money when it is converted?

Discussion in 'Trading' started by Nofear777, Jan 28, 2009.

  1. I would appreciate if someone could give me a detailed process of what happens to both sides of the money when it is converted.

    Lets say I have 10 million dollars and I convert it to all yen.

    Does the dollar simply dissapear from the world pool of dollars with a bigger pool of yen?

    I know its elementary to some of you , but I do not deal much with currency.

    Thanks for your input in advance.
  2. Tums


    someone who gave you the yen has less yen, and more dollar in the pocket.
  3. ITR2744


    "converting $ to Yen" means you sell $ and buy Yen... So there's a counterparty who does the exact opposite: selling Yen and buying $.

    It's the same as selling gold for example: You convert gold into $ (or whatever currency you want).
  4. Ok thanks for the replies, I am clear now.