Definition of Foreign Exchange Markets

Foreign Exchange Markets

Foreign Exchange Market is the framework of individuals, Firms, Banks and Brokers who buy and sell foreign currencies. The foreign exchange market for any one country. Example, the France franc, consists of all the locations such as Paris, London, New York, Zurich, and Frankfurt and so on. The most important foreign exchange market are found in; London, New York, Tokyo, Frankfurt, Amsterdam, Paris, Zurich, Toronto,Brussels, Milan, Singapore and Hang Kong.

The Players of Foreign Exchange Market The main participants in the market are Companies and individuals, Commercial banks, central banks and Brokers. Companies and individuals need foreign currency for business or travel purposes. Commercial banks are the source from which companies and individuals obtain their foreign currency. There are also foreign exchange brokers who bring buyers and sellers and banks together and receives commissions on the deals arranged. The other main players obtaining in the market in the central bank, the main part of whose foreign exchange activities involves the buying and selling of the home currency or foreign currencies with a view to ensuring that the foreign exchange rate moves in line which established targets set for it by the government. There are numerous foreign exchange market centers around the world but dealers in different locations can communicate with one another via the telephone, telex and computers.