Fluctuations in Global Currency Market
The market in which participants from around the world are able to buy, sell, exchange, and speculate on different currencies is called the international currency market. International currency markets are made up of banks, commercial companies, central banks, investment management firms, hedge funds, retail forex brokers, and investors.
The foreign exchange market (forex, FX, or currency market) is a global decentralized market for the trading of currencies. This includes all aspects of buying, selling, and exchanging currencies at current or determined prices.
In terms of volume of trading, it is far the largest market in the world. The main participants in, this market are the larger international banks.
Financial centers around the world function as anchors of trading between a wide range of multiple types of buyers and sellers around the clock, with the exception of weekends.
The foreign exchange market determines the relative values of different currencies. The foreign exchange market works through financial institutions, and it operates on several levels. Behind the scenes, banks turn to a smaller number of financial firms known as “dealers,” who are actively involved in large quantities of foreign exchange trading.
Most foreign exchange dealers are banks, so this behind-the-scenes market is sometimes called the “interbank market”, although a few insurance companies and other kinds of financial firms are involved.
Trades between foreign exchange dealers can be very large, involving hundreds of millions of dollars. Became of the sovereignty issue when involving two currencies, forex has little (if any) supervisory entity regulating its actions: As like other markets, the foreign exchange market is also non-stable.
Mainly because of the differences in the economic growth rate, the political situations and supply-demand chain, the global currency market fluctuates all the time.