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 ?
'We intend to set up a formal governance framework to clearly establish BSP's direct supervision over the foreign exchange market pursuant to our charter,' she said, explaining that this will cover the roles and responsibilities of the BSP as the ultimate overseer of the foreign exchange market.
BSP rushes forex measures as peso weakens anew !-- -- (The Philippine Star) - September 18, 2018 - 12:00am MANILA, Philippines Monetary authorities are rushing a code of conduct governing all trades in the local foreign exchange market as the peso weakened anew yesterday, reentering the 54 to $1 level.
Stock Market: The stock market's response lagged behind the gold and foreign exchange markets for fundamental reasons.
Giannellis and Papadopoulos (2009) employed an equilibrium exchange rate model to test the efficiency of foreign exchange markets of developing countries.
The plan is to offer a distributed ledger that can process financial transactions in the foreign exchange market. This is the first blockchain-related patent from Goldman Sachs.
The Bank of Zambia (BOZ) says it pumped US$ 178 million into the foreign exchange market to prevent the steep depreciation of the Kwacha and ensure foreign exchange market's stability.
The slight increase in overall stress observed in mid-June around the time of a Federal Open Market Committee meeting appears to have been driven by a rise in the level of stress in equity and foreign exchange markets. The stress levels in these markets waned in early July, and the overall level of stress decreased.
The Foreign Exchange Market is the largest and most liquid financial market worldwide.
They are as follows: (a) a well-developed foreign exchange market; (b) a nominal anchor for monetary policy to replace the fixed exchange rate; (c) policy for central bank intervention in the foreign exchange market, that is the practice of buying or selling the local currency to influence its exchange rate; and (d) an exchange rate risk management mechanism for monitoring and managing both public and private sectors exposure.
Today perhaps the largest and certainly most unpredictable force affecting foreign exchange markets involves, of all factors, Japanese housewives and heads of households who are now heavy purchasers of foreign fixed income investments and increasingly are bypassing financial institutions in making their purchases.
said, "while a number of economies continue to use pegged exchange rates and/or intervene in foreign exchange markets, a peg or intervention does not in and of itself satisfy the statutory test for currency manipulation."
The Japanese monetary authorities conducted yen-selling interventions in the foreign exchange markets in Japan, the United States and Europe on Tuesday in a bid to prevent the yen's advance from impeding Japan's economic recovery.

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