Since fund managers need to revalue their investments everyday and not all of their assets are in domestic currency, it is natural that they will need a rate to operate under fort he optimization of the portfolio. Such managers need to know the value of their assets on everyday basis. The used banckmark is the so called London 4PM fixing. One company calculates the rate based on a data sample used one minute before the fix in London. Within the sample, the median value is taken as the closing spot rate value and it becomes the rate of the value of the assets.
Fund manager salso trade currencies and it so happens that banks allow then to do their traiding at the best time for then, the 4PM London fix. The trading platforms are extensivelly overwellmed at that period.
To conclude, even tough central banks provide the rate at a convininet time on everyday basis, this is not the most precised rate to be used for activelly traded currencies like the dollar, the euro, swiss frank, …
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