Get to Know the Foreign Exchange Market

Forex brokers and investors will agree that international trade is all around us. Anytime you purchase a pair of shoes, an electronic device or a product from the mall, chances are it was made in another country and shipped to the United States. The reality is, most countries rely on international trade to provide goods and services at much lower prices than the products that are made within their borders.

But before a country can purchase foreign products or services from another country, it has to first buy the currency of the country they wish to do business with. The buying and selling of currency happens in the foreign exchange market (or forex market) and forex exchange rates refer to the value of one currency compared to another.
Although the word “market” implies a physical place where people go to buy and sell merchandise, the forex market is not a physical location. On the contrary, traders can participate in forex and invest in the market by communicating with one another through telephone and computers. Most of the transactions happen in centers in the United Kingdom, United States and Japan. The remaining transactions are conducted in France, Australia, Singapore, Hong Kong, Germany and Switzerland.
The forex market is open for business 24 hours a day. By paying attention to forex currency trading strategies and signals, banks, brokers, businesses and central banks worldwide buy and sell in the largest market in the world. When the markets close down in San Francisco, the Singapore and Hong Kong markets are open for another day of business.

The Federal Reserve Bank of New York is responsible for foreign exchange-related activities performed by the Federal Reserve System and the U.S. Treasury. The bank monitors and analyzes developments, oversees the U.S. foreign currency reserves, and, when necessary, intervenes in the market.

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