What Is a Cambist?
A cambist is any individual considered to be an expert in foreign exchange rates. The term also refers to a currency exchange manual which lists exchange values. The Cambist manual also has a conversion table for calculations, as well as coin weights and composition. The term comes from the Latin, the word "cambiere" which means to exchange. With the advent of electronics and fast-paced trading, manuals and books detailing exchange rates fell out of favor. Today, the term is mostly a throwback to describe professional currency traders.
- Cambist is an old term referring to experts or manuals that provided foreign exchange information.
- The term is rarely used today, but is sometimes used to refer to those involved in exchange, such as bankers, brokers, traders, or even change machines.
- Today, cambists are no longer needed as real-time foreign exchange rates are available to everyone, online, for free. Banks, brokers, currency houses, or trading floors can exchange currencies quickly at negotiated rates without the use of a cambist.
Understanding the Cambist
Today, the only place you are likely to find the term cambist is on a crossword puzzle. Yet, once upon a time, this position was a requirement for any business involved in international commerce. Cambists have lost their jobs to the speed of the electronic age. However, the term is still occasionally used to describe anyone who is involved with exchanges, such as bankers, brokers, currency traders, or even change machines.
Using books with titles like the Universal Cambist and Commercial Instructor, those employed in the cambist profession would look up the information needed to conduct international commerce. Manuals listed the major cities and transfer points from around the globe, arranged alphabetically.
Details contained in the book included the names of each location's currency and if they were coins or banknotes. For coins, additional information included the quality of the gold or silver contained in the coin and commercial weight for each domination of coin.
The books also described the type of measurement used by the local community. Measures included those for distance, land, and the ever essential, measure of wine and beer.
Sections ended with a chart outlining the duties and allowances for a list of products commonly imported or exported from the location.
Cambist of Today
Currency traders trade in currency pairs on the foreign exchange (FX) market, also known as forex. The forex market is the largest, most liquid market in the world, where trading values which can reach trillions of dollars daily. Aside from the buying, selling, speculation, hedging, and exchanging of currencies, the forex market also supports currency conversion for international trade and investments.
There is no one central marketplace for currency exchange. The forex market is a network of global banks, brokers, and traders located around the world. Major financial centers providing much of the global trade in currencies include London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris, Toronto, and Sydney.
Example of How Currency Trading Works Today
Currency trading can be traced back to ancient times, but the current forex market was in part created as a result of modern foreign trade. When a seller in one country sells a product or service to a buyer in another country, the seller earns in the foreign currency.
For example, when a manufacturer in the United States sells auto parts to a retailer in Japan, the manufacturer receives Japanese yen (JPY). Or, the retailer may pay the US manufacturer in US dollars, which will require the retailer to exchange yen for dollars in order to pay for their order.
When Ford (F) wants to build a factory in Canada, it will need Canadian dollars (CAD) to pay for construction and other expenses incurred in Canadian dollars. Some businesses in Canada may accept US dollars as payment, but then they will likely have to sell those US dollars in exchange for Canadian dollars at some point. The forex market facilitates this exchange of currencies.
In the old days, international deals required a cambist who would provide exchange rates and information to the parties involved. Now, real-time exchange rates are available online to everyone. Banks, currency exchange houses, brokers, or a company's internal trading floor can easily exchange currencies globally and digitally, very quickly.