The Forex (Foreign Exchange in English, or "foreign exchange market") is the market "OTC" (that is to say between operators that are not subject to market "regulated") on which traded currencies around the world between them, currencies quoted against each other in the form of parity.
The Forex is today the largest financial market in the world, the average daily volume of transactions (about 4000 billion dollars in April 2010) representing three times the equity markets and futures (futures markets) combined. Is being developed since the abandonment of fixed exchange rates of various currencies them (and also the reference to the gold standard) in 1974, as Forex market determines the evolution of the parity of all pairs (or "cross") whose currency is the regime of floating exchange rates.
The most traded currencies in the world are Dollar (USD 43% of sales and purchases), the Euro (EUR: 19%), the Japanese Yen (JPY 8.5%), the British Pound (GBP 7.5%), the Swiss Franc (CHF: 3.5%), the Australian Dollar (AUD) Canadian Dollar (CAD). Currency called "secondary" and with exchange rate regimes "linked" or "fixed" (the currency of Argentina for example a fixed parity with the dollar, as the Franc CFA West Africa with the Euro and the Chinese Yuan to a basket of currencies dominated by "Dollar") are subject to little exchange on Forex.
Forex key stakeholders are:
Banks and financial institutions that provide 50% of transactions through proposals for "market makers," offering a price at any time buyer ("bid") and ask price ("ask"), the difference (the "spread" ) is the financial gain;
Large companies who want the whole hedge against currency risk in relation to their international activities (but multinationals have also developed their own trading floors directly involved in Forex speculative purposes);
The central banks involved sometimes the market (buying or selling massively currency) in order to regulate and maintain a specific monetary policy: the European Central Bank will be able to sell Euros if it hopes to reduce this currency;
Institutional investors (hedge funds, etc.). Involved both cover portfolios stocks or bonds in an optical speculative direct up to 30% of Forex transactions;
Individuals whose investments are highly developed through trading "on line" and represent approximately 5% of forex transactions.
A position on the Forex involves selling one currency and buying another. Buy EUR / USD means for an investor to buy Euro and sell dollar.
If an investor expects an increase of EUR / USD (appreciation of the Euro against the dollar) and the euro / dollar actually goes to EUR / USD = 1.3000 to EUR / USD = 1.3050, 10,000 euros will be purchased allowed the investor to earn 50 Dollars.
From Asia to the United States via Europe, Forex is a market that operates continuously, 24 hours on 24. A strategy called "arbitrage" will also play on a shift observed during the same medium. for more visit forex news
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