Forex is an acronym for Foreign Currency Exchange. The forex market, also known as the currency market, is where currencies from around the world are being traded.
There are many participants in the forex market:
• Central Banks : Their job is to stabilize the economy of their country, which includes controlling inflation (price rises) and avoiding recessions. They do it by setting an interest rate (in the United States it is called the “Fed interest rate”) and trading the forex market.
• Commercial Banks : These institutions are the actual traders in the forex market, and all trades go through them. They often trade currencies as a speculation in order to make a profit for themselves.
• Importers and Exporters : Companies that do business with other countries need to change foreign currencies into their own and back. Importers pay in local currency, and exporters receive payments in foreign currencies. Both types need to trade currencies back and forth to make their accounting easier and avoid changes in exchange rates that may harm their business.
• Private Speculators : It is said that over 90% of the activity in the forex market is done by private speculators. These private people or funds trade the forex market in order to make a profit
There are many participants in the forex market:
• Central Banks : Their job is to stabilize the economy of their country, which includes controlling inflation (price rises) and avoiding recessions. They do it by setting an interest rate (in the United States it is called the “Fed interest rate”) and trading the forex market.
• Commercial Banks : These institutions are the actual traders in the forex market, and all trades go through them. They often trade currencies as a speculation in order to make a profit for themselves.
• Importers and Exporters : Companies that do business with other countries need to change foreign currencies into their own and back. Importers pay in local currency, and exporters receive payments in foreign currencies. Both types need to trade currencies back and forth to make their accounting easier and avoid changes in exchange rates that may harm their business.
• Private Speculators : It is said that over 90% of the activity in the forex market is done by private speculators. These private people or funds trade the forex market in order to make a profit
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