Forex Markets are the abbreviated form of Foreign Exchange Markets. In this market the transaction of different currencies of different countries take place between the buyers and sellers. In this form of market a centralized exchange cannot be found and the market is basically a over-the-counter (OTC) one. Though Forex Markets are not controlled through centralized exchange but the different dealers form their own network through the online services through which he transactions are routed. The contracts offered in the forex market are generally customized ones and there are no standardized contracts.
The basic characteristic feature of the Forex Markets is the process of exchange popularly known as barter system. The process through which this barter system in the foreign exchange market works is the coincidental matching of the needs of two parties. In the modern version of the Forex Markets, the buyers and sellers interested in exchanging currencies among them through the large network systems formed between the brokers (including the commercial banks dealing with the transactions in foreign exchange). There are many participants in the Forex Markets namely :-
The buyers and sellers intending to transact foreign currencies between them. These buyers and sellers are generally exporters or importers who either receive or make payments through foreign currencies.
The brokers are another important ingredient in the Forex Markets because the buyers and sellers place their respective orders through them only and the consequent matching between the different ask and bid prices are done through the automated high network system of these brokers.
The apex bank of a country play a major role in the proper functioning of the Forex Markets.
The major currencies that are transacted in the Forex Markets are Dollar, Euro and Yen. The volume in this market is increasing with the passage of every single year. The volume in this market has jumped by almost 100% between the period 1998 and 2006 from an approximate amount of 2.5 trillion US dollars to 5 trillion US dollars.
Forex Markets are present in all over the world and the most important among them are US Forex Market, Japanese Forex Market, UK Forex Market, Canadian Forex Market, Hong Kong Forex Market, Singapore Forex Market, Australian Forex Market, German Forex Market, French Forex Market and Italian Forex Market.
If you are interested in knowing more about the Forex Markets around the world then please go through the following links :-