How Does Forex Markets Work?
What is Forex? Forex or FX trading is the trading of one currency with the other. Buyers and sellers, be it individuals, companies and even central banks exchange currencies at an agreed price. According to reports, Forex is one of the most actively traded markets globally, with a daily trading volume of $5 trillion. If you are living in the U.S and want to buy a commodity from the U.K; either you or the company that you purchase the commodity from has to pay the U.K company in Pound Sterling (GBP). This means that the U.S importer would have to exchange the equivalent value of U.S. dollars (USD) into Pound Sterling (GBP). Similarly, A U.S tourist in the U.K cannot pay in U.S. dollars (USD) because it’s not the locally accepted currency. As such, the tourist has to exchange U.S. dollars (USD) for the local currency, in this case, Pound Sterling (GBP), at the current exchange rate. How do forex markets work? Forex or currency trading is conducted electr...