The foreign exchange (currency or forex) market exists wherever one currency is traded for another. It is the largest market in the world, in terms of cash value traded, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. Retail traders (small investors or speculators) are a minute part of this market, may only participate indirectly through brokers or banks, and may be targets of forex scams. The foreign exchange markets are usually highly liquid as the world's main international banks provide a market around-the-clock. The Bank for International Settlements reported that global foreign exchange market turnover daily averages to $1.9 trillion.
There is no single unified foreign exchange market. Due to the over-the-counter nature of currency markets, there are rather a number of interconnected marketplaces, where different currency instruments are traded. This implies that there is no such thing as a single dollar rate - but rather a number of different rates (prices), depending on what bank or market maker is trading. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs.
Top 6 Most Traded Currencies:
1 United States dollar
2 Eurozone euro
3 Japanese yen
4 British pound sterling
5 Swiss franc
6 Australian dollar.
The main trading centers are in London, New York, and Tokyo, but banks throughout the world participate. As the Asian trading session ends, the European session begins, then the US session, and then the Asian begin in their turns. Traders can react to news when it breaks, rather than waiting for the market to open.
Due to the liquidity of the market, it is less likely to be influenced by unwarranted price manipulation than other markets. Exchange rate fluctuations are usually caused by actual monetary flows as well as by expectations of changes in monetary flows caused by changes in GDP growth, inflation, interest rates, budget and trade deficits or surpluses, and other macroeconomic conditions. Major news is released publicly, often on scheduled dates, so many people have access to the same news at the same time.
Currencies are traded against one another. A Rate of Exchange (also called exchange rate or foreign exchange rate or currency exchange rate) is the ratio at which the unit of currency of one country is or may be exchanged for the unit of currency of another country. Generally, one unit of the home currency is expressed in terms of another currency. For example, an American bank may quote the exchange rate between the dollar and the Yen as the number of dollars needed to buy one yen.
If you have ever wondered how far your money would go in another country then you probably could have used a currency exchange calculator. Currency exchange calculators are widely available online.
An exchange calculator is a great tool for travelers. However, it's even better if you trade currencies for profit. A multi-functional calculator allows you to convert (and reverse-convert) international currencies with ease. The program can essentially combine basic arithmetic operators (+, -, etc.) with exchange values. Currency converters usually cover over 240 currencies from Europe to Africa.
Exchange calculator may be customized depending on your needs. If dealing in international currencies is your business, the program will help you handle any retail or commission costs that might occur. With daily updates on currency prices from the web, an exchange calculator is a great addition to any desktop.