The Foreign Exchange Market

According to the U.S. Department of the Treasury, the foreign exchange market, or FOREX, is the market in which investors buy and sell different currencies. It is the world's largest and most liquid financial market, moving an astonishing average of nearly $2 trillion a day in traded currency. For some sense of scale, consider that as of March 2008, the New York Stock Exchange moved a comparatively small average of $169.6 billion a day. Because it is open 24 hours a day, 5 days a week, the FOREX is also one of the world's most accessible markets. In fact, individual investors are able to trade currency at the same rate and in the same manner as large corporations, investment banks and hedge funds. In addition to these unique attributes, the FOREX is also a decentralized market, meaning there is no one physical location where traders go to complete their transactions; instead, they buy, sell and exchange currencies using a network of various devices, among which the Internet is probably the most important. Although the idea of trading money may seem strange and even far-fetched to some people, it is a vital part of the international economic and political spheres.