Market is the “place” where currencies are exchanged. Currencies are essential to many people round the world, if they realize it or not, because currencies have to be exchanged to be able to conduct international trade and business. If you’re surviving in the U.S. and need it mozzarella cheese from France, either you or the business that you get the mozzarella cheese from must pay the French for the mozzarella cheese in euros (EUR). Which means that the U.S. importer would need to exchange the same value of U.S. us dollars (USD) into euros. The exact same goes for journeying. A French visitor in Egypt can’t pay in euros to start to see the pyramids because it isn’t the locally accepted money. Consequently, the tourist must exchange the euros for the neighborhood currency, in cases like this the Egyptian pound, at the existing exchange rate.
The necessity to exchange currencies is the principal reason why forex is the biggest, most liquid financial market on the planet. It dwarfs other market segments in proportions, even the currency markets, with the average traded value of around U.S. $2,000 billion each day. (The full total volume changes on a regular basis, but by August 2012, the lender for International Settlements (BIS) reported that forex traded more than U.S. $4.9 trillion each day.)
One unique facet of this international market is that there surely is no central industry for forex. Rather, forex trading is conducted electronically over-the-counter (OTC), meaning all transactions arise via computer sites between traders surrounding the world, somewhat than using one centralized exchange. The marketplace is open 24 hours per day, five . 5 days weekly, and currencies are traded worldwide in the major financial centers of London, NY, Tokyo, Zurich, Frankfurt, Hong Kong, Singapore, Paris and Sydney – across almost each and every time zone. Which means that when the trading day in the U.S. ends, forex commences anew in Tokyo and Hong Kong. Consequently, forex can be hugely active any moment of your day, with price rates changing constantly.