Foreign Exchange

The Foreign Exchange, known also by the acronym Forex or Forex currency exchange, is the platform on which currencies are purchased and sold. Foreign currencies are brought into a country through several means. They can come in with tourists who need to exchange their money for the money of the country they are visiting, they can come with pilgrims and business travelers, and they can come through business conducted with other countries. The Foreign Exchange is the place that handles the market for these currency transactions. The Foreign Exchange is the largest, most fluid market in the world.http://www.investopedia.com/university/forexmarket/forex1.asp It commonly does 1 to 3 trillion dollars in daily transactions.http://www.forexrealm.com/what-is-forex.html The currencies are bought and sold in pairs with 4 pairs dominating the trading market. These are the Euro against US dollar, US dollar against Japanese yen, British pound against US dollar, and US dollar against Swiss franc.http://www.forexrealm.com/what-is-forex.html Abbreviated these are EUR/USD, USD/JPY, GBP/USD, and USD/CHF.

The current Forex has no established headquarters or physical location, rather, it follows the course of the sun around the world. Roughl, the market moves from the United States, to Australia, to the Far East and Europe, and then back to the US.http://www.forexrealm.com/what-is-forex.html By overlapping the work day in the different countries, the foreign exchange market can stay open 24hrs, 7 days a week, 365 days a year.

The current Forex came about after the fall the the Bretton Woods system in the 1970s.http://www.forextrading.com/articles/History.aspx This system was based on the US dollar and fixed exchange rates. It was meant to prevent the destabilizing monetary problems that had helped lead to WWII.http://www.forextrading.com/articles/History.aspx When it became clear the the world's economies were moving in different directions, and that the US dollar was not longer viable as the sole international currency, foreign exchange trading with fluctuating exchange rates came about.

The content in this page is not a substitute for professional financial advice. Please contact a finance professional before using the information presented here.