Forex or foreign exchange market is the largest market worldwide where currency is converted to another. It is a market without physical location and is being monitored, on a 24-hour basis, by individuals or entities--like investors--that are concerned with monetary investment. Forex is also where people from different countries consult the value of their currency to US dollars or Euro compared to other countries' currency. US dollar is usually the currency that is being used to compare other currency value in Forex, since it is the widely use currency worldwide. For example, an individual from Philippines would want to know his currency value in Yen, he would have to convert Peso to Dollar and then Dollar to Yen.
Forex is necessary in international business transactions because it enables entities to pay their business obligation in foreign countries with their own currency having the same value as of that foreign countries' currency. These entities could be a Forex broker, banks or other investors.
In Forex, currency conversion is represented in this format: XXX/YYY 1.2345. It means that the 1.2345 is the amount of YYY in every unit of XXX. For instance, EUR/USD 1.5090 would mean that 1 euro is equal to 1.5090 US dollars. This figure is referred to as "Forex rate."
Currency values are not determined by decisions of entities or investors participating in Forex. It is determined by the monetary movement, macro businesses involved in international transactions, and individual country's economy. The value of each currency in Forex fluctuates depending on the economic status of each country. Investors either gain or loss investment interests as currency values inflate or deflate in Forex. Investors monitor the daily change of Forex rate to take advantage of the currency values for their profit.
Forex is necessary in international business transactions because it enables entities to pay their business obligation in foreign countries with their own currency having the same value as of that foreign countries' currency. These entities could be a Forex broker, banks or other investors.
In Forex, currency conversion is represented in this format: XXX/YYY 1.2345. It means that the 1.2345 is the amount of YYY in every unit of XXX. For instance, EUR/USD 1.5090 would mean that 1 euro is equal to 1.5090 US dollars. This figure is referred to as "Forex rate."
Currency values are not determined by decisions of entities or investors participating in Forex. It is determined by the monetary movement, macro businesses involved in international transactions, and individual country's economy. The value of each currency in Forex fluctuates depending on the economic status of each country. Investors either gain or loss investment interests as currency values inflate or deflate in Forex. Investors monitor the daily change of Forex rate to take advantage of the currency values for their profit.
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