Understanding the Foreign Exchange Market

The foreign exchange market, also known as the forex market or FX market, is a decentralized global market where currencies are bought and sold. The primary purpose of the forex market is to facilitate the exchange of one currency into another currency for international trade and investment. Currencies are traded through a broker or dealer and are traded in pairs, with the value of one currency being quoted against the value of another currency. The value of a currency can be influenced by a variety of factors including economic data, political events, and market sentiment. The forex market is the largest financial market in the world, with an average daily trading volume of over $5 trillion.