foreign exchange

1. Transaction of international monetary business, as between governments or businesses of different countries.
2. Negotiable bills drawn in one country to be paid in another country.

For more information on foreign exchange, visit Britannica.com.

The foreign exchange (also known as "forex" or "FX") market is the place where currencies are traded. The overall forex market is the largest, most liquid market in the world with an average traded value that exceeds $1.9 trillion per day and includes all of the currencies in the world.

Investopedia Says:
There is no central marketplace for currency exchange, rather, trade is conducted over-the-counter. The forex market is open 24 hours a day, five days a week, with currencies being traded worldwide among the major financial centers of London, New York, Tokyo, Zürich, Frankfurt, Hong Kong, Singapore, Paris and Sydney - spanning most time zones.

The forex is the largest market in the world in terms of the total cash value traded, and any person, firm, or country may participate in this market.

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Currency-literally foreign money-used in settlement of international trade between countries. Trading in foreign exchange is the means by which values are established for commodities and manufactured goods imported or exported between countries. Creditors and borrowers settle the resulting international trade obligations, such as bank drafts, bills of exchange, bankers' acceptances, and letters of credit, by exchanging different currencies at agreed upon rates.

The result of all this international trade is that financial institutions accumulate surpluses of different currencies from loan repayments by foreign borrowers, and also from import-export trade financing on behalf of bank customers.

The interbank foreign exchange market is an over-the-counter market, a network of commercial banks, central banks, brokers, and customers who communicate with each other by telex and telephone throughout the world's major financial centers. Foreign exchange traders also make markets or speculate in different currencies, usually anticipating future appreciation of stronger currencies against weaker ones, through the foreign exchange Forward Market and the Currency Futures market.

See also Forward Exchange Contract; Forward Forward.

The foreign capital earned by a country's exports. Since the currency of many less developed countries is not accepted by international markets, it often becomes necessary to earn foreign exchange in order to buy imports.

The ways in which debts between two nations that use different currencies are paid. Foreign exchange rates can have an important effect on a nation's economy, because the value of its currency in other countries affects the cost of both imported and exported goods and services. (See balance of payments.)

Look up foreign exchange in Wiktionary, the free dictionary.

Foreign exchange may refer to:

• Exchanging money in one currency for another,the cost of one currency in terms of another. Traded on foreign exchange markets
• Forex trading software, a trading platform
• Foreign exchange service (telecommunications), connection of a phone to a non-local office
• Foreign student exchange, a school program in which students study in another country for a time
• Foreign Exchange (film), a 2008 film starring Jennifer Coolidge
• Foreign Exchange (TV series), television show made by Southern Star Entertainment
• Foreign Exchange (US TV series), a weekly public television show in the US, previously hosted by Fareed Zakaria
• Foreign Exchange (CNBC World), a television news series on CNBC World
• The Foreign Exchange, a hip-hop duo

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