For those who may ask, foreign currency refers to all those currencies that are used by every state or nation outside of your own. And trading foreign currencies in a huge market called the foreign exchange market is a worldwide activity that generates billions of dollars every day. In fact, the numbers are so astronomical that they can reach the trillion mark. But in spite of the huge amount of traded currencies there is no centralized body or board that regulates this foreign currency trade.
For some countries, foreign currencies help a lot in boosting the economy. The massive amount of foreign currencies brought into the country by overseas workers serve a international capital in foreign currency for many countries. This is particularly the case for developing countries in Asia and Latin America. Although many people see foreign currencies only as representative of their countries of origin, for people engaging in currency trading, foreign currencies are the only commodities acceptable.
The exchange of foreign currency all over the world is regulated by a conglomeration of international economic agreements between countries. Most of these agreements have created some forms of regulatory agencies that control the foreign currency trading within their borders. It is to be noted, however, that the foreign currency market exists wherever one currency is traded for another currency.
According to statistics, the most traded currencies in the world are as follows, in descending order: the United States dollar, the Euro, the Japanese yen, the British pound, the Swiss franc, and the Australian dollar.
The amount of currencies being traded everyday are extremely massive which is why the forex market is the largest financial market in the world. The players in this market are big banks, multinational companies, states, governments, other financial markets and institutions all over the world. Individual or retail traders compose only a small part of the market.
Foreign currency markets are quite unlike stock markets in that theyare divided into several levels. And at the top of the heap are the inter-bank markets, which are composed of the biggest banking and investment firms.
For some countries, foreign currencies help a lot in boosting the economy. The massive amount of foreign currencies brought into the country by overseas workers serve a international capital in foreign currency for many countries. This is particularly the case for developing countries in Asia and Latin America. Although many people see foreign currencies only as representative of their countries of origin, for people engaging in currency trading, foreign currencies are the only commodities acceptable.
The exchange of foreign currency all over the world is regulated by a conglomeration of international economic agreements between countries. Most of these agreements have created some forms of regulatory agencies that control the foreign currency trading within their borders. It is to be noted, however, that the foreign currency market exists wherever one currency is traded for another currency.
According to statistics, the most traded currencies in the world are as follows, in descending order: the United States dollar, the Euro, the Japanese yen, the British pound, the Swiss franc, and the Australian dollar.
The amount of currencies being traded everyday are extremely massive which is why the forex market is the largest financial market in the world. The players in this market are big banks, multinational companies, states, governments, other financial markets and institutions all over the world. Individual or retail traders compose only a small part of the market.
Foreign currency markets are quite unlike stock markets in that theyare divided into several levels. And at the top of the heap are the inter-bank markets, which are composed of the biggest banking and investment firms.
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