Forex Market Overview -

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Forex Market Overview

Forex Market Overview

"FX" is an abbreviation of "forex" or "foreign exchange." Foreign exchange is the largest and most liquid market in the world trading approximately $2 trillion every day (that's over 30 times the daily volume of NASDAQ and NYSE combined). The forex market is a cash interbank/interdealer market. In simplest terms, this means the foreign currencies traded in the forex market are traded directly between banks, foreign currency dealers and forex investors wishing either to diversify, speculate or to hedge foreign currency risk. The forex market is not a "market" in the traditional sense due to the fact that there is no centralized location for fx trading activity and, therefore, trades placed in the forex market are considered over-the-counter (OTC). Forex trading between parties occurs through computer terminals, exchanges and over telephones at thousands of locations worldwide. CFOS/FX clients can trade through online forex trading platforms and/or over the telephone directly with a forex broker on our trading desk.

Until recently the forex market has not been available to the small speculator. The large minimum foreign currency transaction sizes and financial requirements left this market in the hands of banks, major foreign currency dealers and the occasional large fx speculator. Now, with the ability to leverage large positions with a relatively small amount of capital (margin), the forex market is now more liquid than ever and available to most investors.

Five major currencies dominate trading in the foreign exchange markets: the U.S. Dollar, Eurocurrency, Japanese Yen, Swiss Franc and British Pound. The foreign currencies are traded in pairs, also known as crosses, in the forex spot market. For example, purchasing the EUR/USD in the forex spot market simply means the purchaser is buying the Eurocurrency and selling the U.S. Dollar in anticipation of the Eurocurrency gaining value in relation to the U.S. Dollar. Similarly, the seller of a EUR/USD contract would be selling the Eurocurrency against the U.S. Dollar. Official figures show the U.S. Dollar is on one side of 83% of all spot foreign exchange transactions. The "spot" market simply refers to a currency contract with a prompt valuation date requiring settlement within two business days.

Over the past several decades, an increase in international trade and foreign investment has made the economies of the world more interrelated. New opportunities for investors have also been created with the fall of communism and the dramatic growth of the Asian and Latin American economies. Today, supply and demand for a particular currency is the driving factor in determining exchange rates. Many factors such as regularly reported economic figures and unexpected news reports, such as disasters or political instabilities, could also alter the desirability of holding a particular currency, thus influencing international supply and demand for that currency. It should come as no surprise that many shrewd investors have already taken advantage of the fluctuation in exchange rates to profit handsomely.

John Nobile - Senior Account Executive
CFOS/FX - Online Forex Spot and Option Brokerage

In The News:

Banks' trading profits dropped 84 percent in 1Q
The Times and Democrat, SC - 5 hours ago
Trading activity, which is concentrated among large US commercial banks, includes bets on interest rates, foreign currency, commodities and credit ...

AFP
Asian currencies mostly down against dollar
Economic Times, India - 7 hours ago
The New Zealand dollar ended local trading Friday at 75.61 US cents, down from 76.05 at the end of the previous week. The currency lost ground midweek after ...
Euro-dollar rate is stable in thin trading AFP
Dollar steady vs. yen, euro in Tokyo deals+ TMCnet
Euro dips against dollar to US$1.5880 in morning trading; market ... International Herald Tribune
The Age - Forex Prosall 468 news articles

domain-B
Canada Afternoon: C$ Flat As US Market Close Quells Trading
FXstreet.com The Foreign Exchange Market, Spain - Jul 4, 2008
As fuller currency trading resumes next week, the US dollar is likely to continue to benefit from the more positive tone it's enjoyed since comments on ...
Canadian telecom BCE, suitor agree on terms Sydney Morning Herald
BCE, buyer group reach final agreement to complete buyout Trading Markets (press release)
all 359 news articles

Crude Prices Drop By More Than $1
AHN - Jul 4, 2008
In currency trading, the yen changed hands at 106.72 yen per US dollar in Asia. In late New York on late Thursday, the Japanese currency was at 106.07 yen ...
Energy....the New Currency? Inside Futures
Oil Is Steady Near Records as Investors Seek Stocks Alternative Bloomberg
Oil heads past $145 for 1st time; pump cost up too The Associated Press
The Australian - Financial Newsall 2,442 news articles

Canada's Dollar Falls After US Job Report, Trichet's Comments
Bloomberg - Jul 3, 2008
``In general, what we've seen is the Canadian dollar trading in sympathy with the US,'' said John McCarthy, a director of currency trading at ING Financial ...

Top Currency Trading Ideas for the Week of June 30, 2008
Daily FX, NY - Jun 30, 2008
Visit our recently updated Euro Currency Room for specific resources geared towards this currency. The EURUSD is expected to exceed 1.6018 and continue on ...

Euro-dollar rate stable in thin trading
Taipei Times, Taiwan - 16 hours ago
... the single currency hurt by a weak reading on German industrial orders. The euro in late day trading was at US$1.57 against US$1.5694 late on Thursday. ...
Dollar Basks in ECB's Caution Wall Street Journal
Euro flat after post-ECB dip MarketWatch
WORLD FOREX: Dollar Little-Changed As Holiday Thins Trade FXstreet.com The Foreign Exchange Market
Bloomberg - The Associated Pressall 1,861 news articles

AFP
Daily currency analysis - Jul 5
International Business Times, NY - 18 hours ago
By Darrell Jobman by Darrell Jobman, Editor-in-Chief, TradingEducation.com, LLC The US currency edged stronger in European trading on Wednesday, ...
India Morning Call - Global Markets Reuters India
Forex - Pound falls on weak UK construction PMI, housing equity ... Forbes
all 46 news articles

Emirates Business 24/7
Abu Dhabi body urges Gulf states to rethink dlr pegs
guardian.co.uk, UK - 6 hours ago
The report, which also weighed the pros and cons for the UAE to keep its currency pegged to the dollar, reiterated that the second-largest Arab economy was ...
Abu Dhabi urges shift from dollar peg PRESS TV
No 'magical' cure Zawya
Call to peg UAE dirham to basket of currencies Khaleej Times
ArabianBusiness.comall 21 news articles

US Jobs: Not Bad Is Good Enough
Forbes, NY - Jul 3, 2008
... Trading's director of broker-dealer relations Frank O'Connor told Forbes.com he thought the ECB rate cut had already been built into currency trading, ...
Street Finishes Strong, Week Finally Over Forbes
Street Sticking It Out Forbes
all 3 news articles

currency trading - Google News