Foreign Exchange (Forex)
What is a Foreign Exchange (Forex)?
How Forex Markets Work
Foreign Exchange has no centralized market. Instead, a forex market exists wherever the trade of two foreign currencies are taking place. It is open 24 hours a day, five days a week. This forex market exists to ease investment and trade. The primary trading centers are London, Paris, New York, Tokyo, Zurich, Frankfurt, Sydney, and Singapore. All levels of traders, from central banks to speculators, trade currencies with one another.
Why Forex Markets Matter
The forex market forms the essential infrastructure for international trade and global investing. It is crucial for supporting a country's imports and exports, which also grants it access to resources and creates additional demand for goods and services. Since many currencies abound along with a few major players like the U.S. dollar, the British pound, and the euro, this important apparatus provides a clearinghouse to trade those major currencies.