foreign exchange market


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Related to foreign exchange market: Foreign Exchange Rates

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 ?
"This exchange rate dynamics highlights the reform of the foreign exchange market introduced since 2012.
To the author's knowledge, there have been three empirical studies (Wickremasinghe, 2005, Wickremasinghe, 2007 and Wickremasinghe and Kim, 2008) on the efficiency of foreign exchange market of Sri Lanka.
The Federal Reserve Bank of the United States regulates the country's foreign exchange market. It also holds the sole authority to issue the US dollar banknotes and coins.
The simple risk-neutral efficient market hypothesis assumes that foreign exchange market participants are risk-neutral and their expectations are rational.
Asked about the effect of the latest intervention, as the impact of the one in August turned out to be short-lived, Shirakawa declined to comment specifically but said he expects the intervention will have an ''adequate'' impact on price formation in the foreign exchange market.
"With the unprecedented revenue growth of the firm for the year 2010, we can say that we have even exceeded our profit target for the last year as we have noted a revenue increase of almost 10 times the rate of the entire foreign exchange markets," avowed Mr.
The CBY's Governor discussed with general-directors of commercial and Islamic banks the developments in the foreign exchange market, stressing the need for the banks' role in financial intermediation and operations of the foreign exchange market.
The bank said that it has not tightened foreign exchange market rules to prevent the local currency from rallying.
With much longer history, the Taipei Foreign Exchange Market boasted much higher trading volume than the Yuanta market, with its exchange rates being major reference for local companies in offering international quotes.
Iskandar Al Najjar, director of Advanced Currency Markets (ACM) said the foreign exchange market is one of the most attractive investment options that many people are not aware of, or are not utilising to its full potential.
Sweeney (international finance, McDonough School of Business, Georgetown U.) presents a collection of 17 previously published empirical papers on the behavior of exchange rates and foreign exchange markets. The papers are grouped into sections discussing fundamentals in the foreign exchange market, statistical models of the foreign exchange market, technical analysis of foreign exchange markets, central bank intervention in the foreign exchange market, and micro structure of the foreign exchange market.
The bank said automatic price-matching transactions will be maintained after the introduction of OTC transactions, enabling participants in the interbank foreign exchange market to choose between the two modes to conduct spot foreign exchange transactions.

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