Forex is an international market
The word Forex is an acronym for the term Foreign Exchange. It means exchange of one currency for another on a financial market. Forex has been in existence since the 70’s of the XX century. It is a fast-growing and one of the most heavily traded markets in the world. The daily trading turnover on Forex is worth almost 4 trillion US dollars.
Like any other market, Forex trades certain goods, namely national currencies of different countries.
The key principle of currency dynamics is the need of government agencies as well as commercial companies around the world to convert profits generated abroad into their national currencies. However, their share accounts for just 5% of the Forex turnover. The remaining 95% comes from speculative capital of currency traders who are focused on gaining profits from currencies fluctuations.
