foreign exchange market

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Related to Currency markets: Forex

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 ?
The program was created in response to the multiple currency crises in the last 18 months and the recent currency market upheaval created by Brexit, the British vote to exit the European Union.
The agreement will give the banks an access to the national currency markets of the CIS members for holding conversion operations under equal conditions provided by the banks within the country.
The Czech central bank has said that it is ready to intervene in the currency markets.
KARACHI -- Pakistan's rupee staged a smart recovery against the US dollar Tuesday after the central bank prod banks to curb speculations in the currency market.
A direct won-yuan currency market will be opened in Korea, and the foundations will be laid for Korea to establish a direct foreign currency market in China.
htm) launched a criminal investigation into whether the world's biggest banks attempted to manipulate the currency markets .
Direct Currency Markets Limited has attracted clients from 45 countries around the world and continues to establish a solid reputation as a reliable, transparent, high performance global currency trading brokerage firm," commented Mr.
The murky prospects for the eurozone's biggest economy rekindled risk-averse sentiment in currency markets, prompting market players to sell both euros and yen for dollars, dealers say.
Maintaining that the stability of the currency markets was intact, the central bank said that it would intervene in the markets if required.
WASHINGTON: The International Monetary Fund said the dollar was overvalued on the currency markets, while the euro, yen and pound were in line with fundamentals.
Currency markets are increasingly being appreciated and accepted as a significant source of alpha that is portable, uncorrelated and sustainable.
Summary: Intervention in the currency markets by the SNB has certainly weighed on the appeal of the Swiss franc, and as the central bank aims to counterbalance.