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 ?
Local currency market facing a sudden dollar shortfall as after United States suspension of funds on the war on terror as well as possibilities of further economic sanctions has created panic buying in the local currency market.
to assist both companies' entry in the crypto currency market, the company said.
The ratification of the agreement will create favorable conditions for equal and mutually beneficial participation of the banks of the CIS member states in conversion operation on currency markets of the CIS states, reports Kazinform.
CBS had announced a plan to appropriate $ 65 million to be sold in market for commercial and non-commercial purposes as part of its unconventional intervention mechanism in foreign currency market.
Ongoing political crisis is weighing on the capital and currency markets.
The direct won-yuan currency market will save money on currency exchange fees as it will no longer be necessary to use the dollar as a medium in won-yuan transactions.
The Financial Conduct Authority is mulling over creating a new set of rules for the largely unregulated currency markets after the completion of a raft of foreign exchange manipulation investigations.
Summary: TEHRAN (FNA)- Iranian Intelligence Minister Heidar Moslehi blamed foreign actors and media for the recent fluctuations of foreign currency rates in Iran, and warned certain regional states against their cooperation with the western intelligence services in destabilizing Iran's currency market.
The central bank of Ukraine has said that it would liberalise the currency market to meet demands from the International Monetary Fund.
MILAN, October 28, 2010 (Balochistan Times): The recovery in the world economy is at risk due to currency market manipulation and a resulting increase in global trade imbalances, Bank of Italy governor Mario Draghi said on Thursday.
Deutsche Bank has launched a UCITS III compliant currency fund, a benchmark index product which offers institutional investors access to broad currency market returns.
According to the Central Bank, the increase is partly due to the selling of Eurobonds, as 15 million euros is a result of the buying of foreign currency on the foreign currency market.