The foreign exchange market is the market for buying and selling different currencies. It is primarily an over-the-counter market with trades between large commercial banks accounting for most foreign currency transactions. Other participants in the foreign exchange market include:
brokers, who match buyers and sellers in the market
customers of banks or brokers, mainly large businesses who engage in international trade and/or investment, and
central banks
Where can I find more information about the foreign exchange market?
The
Federal Reserve Bank of New York website has a document on
foreign trade and foreign exchange including a chapter, Foreign
Currency Exchange, that discusses the basics of the foreign
exchange market. For more detail on the foreign exchange market,
the website also has a document titled All
About...The Foreign Exchange Market in the United States.
What is the foreign exchange market?