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 ?
As part of its custody bank line of business, State Street safeguards clients financial assets and offers such services as indirect foreign currency exchange trading (Indirect FX) for clients to buy and sell foreign currencies as needed to settle their transactions involving foreign securities.
He said eight employees of Pakistan Currency Exchange were also apprehended during raid for keeping more foreign currency at the exchange than the authorised limit.
As of December 12, USD in currency exchange offices of the capital amounted to 57.
The owners of currency exchange ATMs will have to present documents at the NRA guaranteeing that fraud is impossible.
BEIRUT: Association of Lebanese Moneychangers called on Central Bank to annul a decision that more than doubled requisite capital needed for licensing currency exchange businesses.
FCE serves about 140 banks in the United States, allowing them to offer foreign currency exchange services to their clients on a private label basis.
The regulations are aimed at controlling currency exchange transactions, facilitating the creation of a system of public services administration and registering businesses in East Timor, he said.
We've certainly been busy monitoring our overseas markets and have watched major new construction drive up rates, along with shifts in currency exchange rates.
TOKYO -- OKI (TOKYO:6703) has developed and initiated sales of its RG7 Currency Exchanger, the world's first currency exchange machine capable of recycling deposits and withdrawals in multiple currencies from a single unit.
The government of Argentina has said that it is to ease regulations on opening and operating currency exchange businesses.
The Ukrainian banks are now allowed to change currency exchange rates during the working day, according to the website of the National Bank of Ukraine (NBU).
Most money changers in these shops are well-versed in the languages used in the field of currency exchange, and able to communicate numbers in Bahasa Indonesia, French, Persian, Urdu and English.