foreign exchange market

(redirected from Currency markets)
Also found in: Dictionary.
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 ?
KARACHI -- The continuous fall in rupee's value abated on Wednesday after 10 days of frenzied trading in the currency market.
at the SBP Main Building with introductory speech of SBP's Chief Spokesman Abid Qamar on the regulations and interventions by the Central Bank in the currency markets for stabilization of currency value.
KARACHI -- A crackdown on illegal money exchanges during the last few months and a smooth supply to the Exchange Companies from the banking sector have supported the Pakistani Rupee in the open currency market, which closed at Rs126.50 for buying and Rs127.00 in the open currency market on Friday evening.
The head of Thailand's central bank said that the bank had intervened in the currency markets following rapid fluctuations in the currency's values.
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.
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. In early Tuesday trade, the rupee gained 90 paisas to 102.20 to a dollar in the official interbank 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.
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.
"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 official also attributed the recent fluctuations in the gold and currency markets, partially to mismanagement by some state bodies.
The EU's financial services watchdog has warned consumers against making risky bets on currency markets after noticing a spike in unauthorised firms offering investments.
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.