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FOREX
- The foreign exchange market (forex, FX, or currency market) is a worldwide decentralized financial market for the trading of currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends.
The purpose of the foreign exchange market is to assist international trade and investment. The foreign exchange market allows businesses to convert one currency to another. For example, it permits a U.S. business to import European goods and pay , even though the business's income is in . Some experts, however, believe that the unchecked speculative movement of currencies by large financial institutions such as hedge funds impedes the markets from correcting global current account imbalances. This carry trade may also lead to loss of competitiveness in some countries.
In a typical foreign exchange transaction a party purchases a quantity of one currency by paying a quantity of another currency. The modern foreign exchange market started forming during the 1970s when countries gradually switched to s from the previous , which remained as per the .
The foreign exchange market is unique because of
*trading volume resulting in market
*geographical dispersion
*continuous operation: 24 hours a day except weekends, i.e. trading from 20:15 on Sunday until 22:00 UTC Friday
*the variety of factors that affect s
*the low margins of relative profit compared with other markets of fixed income
*the use of to enhance profit margins with respect to account size
As such, it has been referred to as the market closest to the ideal , notwithstanding by s. According to the , average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this.
This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:
*$1.005 trillion in transactions
*$362 billion in
*$1.714 trillion in
*$129 billion estimated gaps in reporting
Foreign Exchange - Page: 1
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