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 ?
Changes in foreign currency exchange rates affect the translation of sales and earnings of the Company's international businesses into U.S.
Changes in the forward contract's fair value related to changes in the difference between forward and spot rates is recognized in earnings in the same line of the income statement as the foreign currency exchange gain or loss on the underlying asset or liability.
Among the revealed violations of the order of currency exchange operations, the following were significant:
Foreign currency exchange rate fluctuations impacted net merchandise sales negatively by $84.7M or 3.3% versus the same prior year ten-month period.
Qasim Qayyum was not even familiar with his cousin Shahid Rafique's firm named Usman International whereas Fazal Dad too feigned ignorance about currency exchange companies.
NBC's Monetary Policy Committee conducted a meeting last Friday and according to its press release issued the same day, it will continue stabilising the currency exchange rate based on actual economic change.
Agency raids offices of 3 currency exchange companies
Criminal proceedings have been initiated against owners of the illegal currency exchange business offices located in F-10 Markaz and Blue Area.
The sanctions included delicencing 13 currency exchange companies, and suspending 15 others for various periods ranged from three months to one year.
'The shop apparently ran business of decoration items while infect, it was used for illegal business of currency exchange,' they said.
Bahrain based digital currency exchange, rain, has today announced the launch of its public waiting list, ahead of a full scale launch next year.
Knightsbridge Foreign Exchange was founded on the premise that businesses and individuals are underserved by their banks in terms of proactive service and competitive currency exchange pricing and has aimed to get the best rates for their clients, having negotiated the best foreign currency exchange pricing with Canadian financial institutions.