Currency Markets

The currency exchange market is an inter-bank or inter-dealer market that was established in 1971 when floating exchange rates began to materialize. Trading is not centralized, as is the case with many stock markets (i.e. NYSE, ASE, CME) or as the case for currency futures and currency options, which trade on special exchanges. Dealers often "advertise" exchange rates using a distribution network, then use the information "agree" to a rate and a trade.

Considering trading volume, the currency exchange market is the worlds largest market, with daily trading volumes in excess of $1.5 trillion U.S. dollars, which makes it is by far the most liquid market in the world today. Because of the volume in trading, it is impossible for individuals or companies to affect the exchange rates and even central banks and governments find it increasingly difficult to affect the exchange rates of the most liquid currencies,...
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