Forex exchange market

Posted on June 15th, 2008 by admin, under forex brokers.

Forex market is the interbank market, formed in 1971, when international trade shifted from fixed to floating exchange rates. This combination of agents foreign exchange market transactions on the exchange specified amounts of currency of one country to another currency on an agreed rate at a certain date. When the exchange rate of one currency for another defined very simply: supply and demand - the exchange on which both sides agree.

The volume of world foreign exchange market operations is constantly growing. This is linked to the development of international trade and lifting currency restrictions in many countries. The daily volume of conversion transactions in the world was in mid-1998 1 trillion 982 billion U.S. dollars (per share of the London market accounted for approximately 32% of daily turnover, New York exchanged about 18%, the German market - 10%). Impressive is not only in itself volume of transactions, but also the speed with which observed the development of the market: in 1977, the daily turnover stood at five billion U.S. dollars over ten years he rose to 600 billion and reached one trillion dollars in 1992. About 80% of all transactions account for speculative transactions, which seek to profit from the games at the difference in exchange rates. The game that attracts many participants, as financial institutions and individual investors.

Consequently, the highest rate of development of information technologies in the past two decades, the market itself has changed beyond recognition. Surrounded by caste mystery once glamour profession currency dealer has become almost mass. Currency transactions, the former privilege of only the most recent major banks monopoly, are now commonly available, thanks to e-commerce systems. And the biggest banks themselves also often prefer to trade in electronic systems to individual bilateral transactions. The share of electronic Forex brokers now account for 11% of the market FOREX. Daily volume of transactions of the largest international banks reaches billions of dollars.

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