This video highlights the meaning of the Foreign Exchange and those involved in its trading. It sums up the main players in the market and how the trading process works.
The Foreign Exchange, or Forex as it is commonly known, is a global wide trading market of foreign currencies. With so many currencies being used around the world it is important for the market to exist so that the US dollar can be transferred into the Euro at a fair rate. These two currencies are just an example but every currency in the world is traded.
This video explains how foreign currencies enter countries via businessmen, pilgrims and tourists amongst many others means. It is in function 365 days a year, 7 days a week, 24 hours a day without breaks. Foreign exchange is therefore constantly in motion.
The video highlights that the main participants of the Forex are:
Central Banks of Countries: They do their best to make sure the currency rate optimizes their management of the economy.
Commercial Banks: Intend to manage customer funds and take care of their own liquid assets using the Forex.
Financial Companies and Broker Houses: Work as a middle man on the market and make their money that way.
Private Individuals: The every day individual who trades on the foreign exchange.
The video further explains how the Forex had exchanges across the globe based in all the major cities such as New York, Tokyo and London. It also touches upon the involvement of news agencies like Bloomberg, Dow Jones and Reuters who collect currency quotations and sell them on to the banks.
Even though the individual city exchanges are open for a certain period of hours in the day, because the exchanges are set up in varying time zones across the world, they overlap each other to ensure the market is constantly open in one form or another.
This video delves into how the currency market works covering the dynamics involved the participants involved. A bit of understanding is required to get to grips with the roles of the participants, especially given that the different participants all affect each other's trading. The involvement of the news agencies only complicates matters but the video does well to keep things concise, simple and easy to understand.