foreign exchange market

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Foreign exchange market

Largely banks that serve firms and consumers who may wish to buy or sell various currencies.

Foreign Exchange Market

A market for the trading of currencies. For example, one may buy dollars or sell pounds on a forex market. Foreign exchange is one the largest and most liquid markets in the world. Trading occurs over-the-counter, and most of the major players are governments, banks, and speculators. Forex markets are often used in hedging strategies.

foreign exchange market

a MARKET engaged in the buying and selling of FOREIGN CURRENCIES. Such a market is required because each country involved in INTERNATIONAL TRADE and investment has its own domestic currency and this needs to be exchanged for other currencies in order to finance trade and capital transactions. This function is undertaken by a network of private foreign exchange dealers and a country's monetary authorities acting through its central banks.

The foreign exchange market by its very nature is multinational in scope. The leading centres for foreign exchange dealings are London, New York and Tokyo.

Foreign currencies can be transacted on a ‘spot'basis for immediate delivery (see SPOT MARKET), or can be bought and sold for future delivery (see FORWARD MARKET). Some two-thirds of London's foreign exchange dealings in 2000 were spot transactions.

The foreign exchange market may be left unregulated by governments, with EXCHANGE RATES between currencies being determined by the free interplay of the forces of demand and supply (see FLOATING EXCHANGE RATE SYSTEM), or they may be subjected to support buying and selling by countries' central banks in order to fix them at particular rates (see FIXED EXCHANGE RATE SYSTEM).

foreign exchange market

a MARKET engaged in the buying and selling of FOREIGN CURRENCIES. Such a market is required because each country involved in INTERNATIONAL TRADE and FOREIGN INVESTMENT has its own domestic currency, and this needs to be exchanged for other currencies in order to finance trade and capital transactions. This function is undertaken by a network of private foreign exchange dealers and a country's monetary authorities acting through its central banks.

The foreign exchange market, by its very nature, is multinational in scope. The leading centres for foreign exchange dealings are London, New York and Tokyo.

Foreign currencies can be transacted on a ‘spot’ basis for immediate delivery (see SPOT MARKET) or can be bought and sold for future delivery (see FUTURES MARKET). Some two-thirds of London's foreign exchange dealings in 2004 were spot transactions.

The foreign exchange market may be left unregulated by governments, with EXCHANGE RATES between currencies being determined by the free interplay of the forces of demand and supply (see FLOATING EXCHANGE RATE SYSTEM), or they may be subjected to support-buying and selling by countries’ CENTRAL BANKS in order to fix them at particular rates. See FIXED EXCHANGE RATE SYSTEM, TOBIN TAX.

References in periodicals archive ?
Officers found the cash currency exchange rate being displayed but, in some instances, no rate for traveller cheques.
According to the company, this decrease was a result of unfavorable currency exchange rates in the Brazilian real and Argentine peso.
It can simulate capital market conditions for six countries at a time, based on interest and inflation rates, currency exchange rates and returns on large-cap and small-cap equities and corporate bonds.
The three regulations are aimed at regulating currency exchange transactions, facilitating the establishment of a public services administration and registering businesses in East Timor.
The regulations stem from the fact that, while currency exchange businesses are often used to launder money, they have been unregulated.
The results of a sensitivity or shock analysis (assessing a hypothetical effect on future earnings or fair values of financial and commodity instruments) of a selected move in interest rates, currency exchange rates and commodity prices, such as the effect of a 1% or 2% increase in interest rates on an entity's earnings.
Moreover, the system - known as VEST for Voice English/Spanish Translator - handled sentences dealing only with currency exchange and routine banking transactions.
749 F2d 369, aff'g 80 TC 551 (1983), the Sixth Circuit held that foreign currency exchange losses attributable to principal repayments were ordinary losses.
For example, at the current currency exchange rate of 1.
TOKYO -- OKI (TOKYO:6703) today announced the delivery to Travelex Japan, one of the largest stores specializing in currency exchange, of its RG7 Currency Exchanger, a currency exchange machine capable of simultaneously recycling deposits and withdrawals between Japanese yen and multiple foreign currencies.
Currency exchange offices of Kyrgyzstan are payers of patent, i.
This growth rate has been maintained for 6 years since the moment when the world's first currency exchange platform between users was established.