The foreign exchange market (also known as forex, FX or the currency market) is an over-the-counter (OTC) global marketplace that determines the exchange rate for currencies around the world. In terms of trading volume it is, by far, the largest financial market in the world. Currencies are always traded in pairs, so the “value” of one of the currencies in that pair is relative to the value of the other. This determines how much of country A’s currency country B can buy, and vice versa. Establishing this relationship (price) for the global markets is the main function of the foreign exchange market.
