Forex Markets

Read this tip to make your life smarter, better, faster and wiser. LifeTips is the place to go when you need to know about Forex Fundamental Analysis and other Forex topics.

What are the Forex markets?

Forex Markets

The Federal Reserve Bank of New York surmises forex market participants as:

Banks and other financial institutions are the biggest participants. They earn profits by buying and selling currencies from and to each other. Roughly two-thirds of all FX transactions involve banks dealing directly with each other.

Brokers act as intermediaries between banks. Dealers call them to find out where they can get the best price for currencies. Such arrangements are beneficial since they afford anonymity to the buyer/seller. Brokers earn profit by charging a commission on the transactions they arrange.

Customers, mainly large companies, require foreign currency in the course of doing business or making investments. Some even have their own trading desks if their requirements are large. Other types of customers are individuals who buy foreign exchange to travel abroad or make purchases in foreign countries.

Central banks, which act on behalf of their governments, sometimes participate in the FX market to influence the value of their currencies.

The over the counter trade is continuous and multiple foreign exchange currency trades which occur through brokers, bankers and investors. Companies, such as FX Club Financial Company, assist with individual broker trade, with low to no commission. The UK is where the most significant amount of global currency exchange occurs. Interestingly, the UK pound is not the most traded currency—the U.S. dollar is.

   

Comments

Nobody has commented on this tip yet. Be the first.



Name:


URL: (optional)


Comment:


Not finding the advice and tips you need on this Forex Tip Site? Request a Tip Now!


Guru Spotlight
Phyllis Serbes