FOREIGN EXCHANGE MARKET meaning

FOREIGN EXCHANGE MARKET

Foreign exchange market can be explained as

• A system where foreign currencies are bought and sold
• Foreign exchange means the money of foreign country i.e. foreign country bank balance,  cheques, drafts and banknotes.
• Also called as FOREX marke
• There are various buyers and sellers
• Individuals, firms, foreign exchange brokers, commercial banks and the central bank are main players
• It is an agreement between a buyer and a seller that a fixed amount of currency will be delivered for some another currency at a specified rate
• Foreign exchange market is a system, not a place
• The transactions in this market are not confined to only one or few foreign currencies.
• It deals with number of currencies.
• The main currency used in Forex trading is the US dollar
• In this market Foreign currencies are traded, converted and exchanged
• Foreign exchange is the art and science of international monetary exchange
• In other words it is the mechanism for exchanging one currency for another