Global currencies, trade and economic power The foreign exchange market (forex) is the largest financial market in the world. This is where currencies are traded, prices are set and international transactions are facilitated. Whether companies, banks or states - everyone who operates globally is dependent on the foreign exchange market. It is important for investors to understand exchange rate risks and global correlations.
💱 1. what is foreign exchange?
🧾 Non-cash foreign means of payment
- Foreign currency accounts
- Foreign bank transfers
- Cheques in foreign currency
- foreign securities
💰 Important: This does not include cash - these are Varieties.
🌐 2. what is the foreign exchange market?
🌍 World's largest financial market
- Completely decentralised
- Open 24 hours (Mon-Fri)
- purely electronic
- Several trillion USD trading volume per day
🔄 Function: This is the price at which one currency is exchanged for another.
🏦 3. who trades on the foreign exchange market?
🏛️ Central banks Steuern Währungen über Zinsen und Interventionen.
🏢 Commercial banks The largest market participants.
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