foreign exchange market - Investment & Finance Definition
The world’s largest and most liquid financial market, which operates 24 hours a day, 365 days a year. Turnover in the foreign exchange market, where one country’s currency is traded for another, is estimated to be about $1.5 trillion a day. Trades may be con- ducted over computer or Internet-based trading systems, over the phone directly with a bank, or with a broker. A limited amount of trading is conducted on futures markets such as the Chicago Mercantile Exchange. Four main currencies, representing the world’s largest economies, are traded against the U.S. dollar: the British pound, or sterling, (GBP); the Swiss franc (CHF); the euro (EUR); and the Japanese yen (JPY). These currencies, along with many minor ones, are traded by governments, corporations, fund managers, and speculators.