Market where currencies are traded internationally About a trillion (million million) dollars-worth of foreign exchange is traded globally every day, making forex larger than all bond markets put together Currency markets exist in the form of spot, forward, futures and options markets Foreign exchange transactions are made up of: Trade flows Only 5% to 10% of total forex transactions Imports usually need to be paid for in the currency of the country from which they originate Exports are usually paid for in one's own currency A trade deficit therefore causes a currency to depreciate Flow-ons Created when a large trade is split up into several smaller trades Capital flows Cross-border investment Speculation Short-term investment based on expected currency movements This accounts for the lion's share of forex market volume
Market for trading currencies internationally The foreign exchange market, also referred to as the Forex and FX market, is a decentralized market that has no physical exchange floor Trading is done over the counter, via phone, fax or electronic distribution networks Turnover in this market is approximately $1 5 trillion USD daily, making it the largest, most liquid financial marketplace
An over-the-counter market where buyers and sellers conduct foreign exchange business by telephone and other means of communication Also referred to as a "forex market"
Market in which foreign currencies are bought and sold and exchange rates between currencies are determined The exchange rate is the price at which one country's currency can be converted into another Some exchange rates are fixed by agreement, but most are determined by supply and demand on the exchange market BACK TO TOP