Foreign Exchange : Market That Provides Liquidity To World Market

Every country has its own currency. USA has dollar. National currency of Japan is Yen. Combined currency of Europe is Euro. Indian national currency is rupee. Trade across the nations has increased. Since the currency is not same in every country, there should be some system that a person can trade in another country and pay for the goods purchased in a form that is acceptable to the seller. Here, comes the need of foreign exchange system.
Foreign exchange is like stock exchange. As in stock exchange shares are bought and sold. Similarly in foreign exchange, currencies are exchanged. Foreign exchange is made to provide more useful services to the customers, traders or participants. Big commercial banks, central banks, brokers, registered dealers are participants of foreign exchange market. Forex Market also differs in size from the Stock Exchange Market. The Forex market trades amount to billions of dollars each day. That’s why Forex market is the biggest market in the world. Anyone can trade in Foreign exchange market. Its largest central market place is located in the main cities of the world like New York, Tokyo and London etc.
Exchange between foreign currencies provide liquidity and accessibility to the traders. Foreign exchange is the market where exchange of currencies takes place for different foreign countries. More foreign countries get listed so that their currencies can be exchanged with others. The entry of any foreign currency is free and any number of countries can enter the foreign exchange market for buying and selling foreign exchange currencies. Let’s see some terms related with foreign exchange market.
1.RATE : The current price of a currency.
2.SELL PRICE : The price at which traders sell their currency.
3.BUY PRICE : The price at which traders buy a certain currency.
Like Stock exchange, Foreign exchange rates vary from time to time and the market face fluctuations.