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The Foreign Exchange Market

The adoption of liberalization, privatization and globalization (LPG) in models of economic systems in many countries in the world, had a burgeoning increase in international transactions during the last four decades and growing interdependencies of the country. The foreign exchange market is the market where currencies are bought and sold against each other. It is the largest market worldwide, over 1000000000000 dollars are traded each day. The foreign exchange market is an over-the-counter (OTC) market. It has no centralized physical or electronic market places (such as a stock exchange) with a central trading mechanism where traders meet cleaning and currency exchange. It is a world-wide network of inter-bank traders, especially consisting of banks, connected by telephone lines and computer terminals and other electronic means of communication.

Why study foreign trade?

Market structure and participants