Forex represents the global market of currency exchange operations one of the largest segments of the global financial market. In organization and technical aspects, Forex functions as a system of banks united into a common informational network and systematically carrying out cashless operations for currency exchange with each other. It should be noted initially that Forex is not an exchange in legal and organizational sense.
The standard currency exchange operations that are carried out by Forex participants can have different specifics depending on what goals they pursue:
- Currency speculations (making profit if currency sale rate in regard to currency exchange transaction is higher than its purchase rate)
- Hedging operations (insuring various commercial transactions and assets nominated in foreign currency from unwanted change of currency rate)
- Currency exchange operations carried out by Forex parties when required and not pursuing speculative purposes (for instance, importers buy, and exporters sell foreign currency, which is stipulated by foreign trade activity specifics)
Intervention operations carried out by central banks of various countries at Forex with the purpose of regulating currency rates in the interest of economic development of specific countries (implemented by means of carrying out currency exchange operations in large volumes that can affect the exchange rate of a specific currency). From the bitcoin era review you can have the best deal.
From the Commercial Banks
Commercial banks that ensure direct currency exchange operations are indispensable and very significant currency exchange operation parties from the point of view of Forex activity. Due to the activity of the banks, Forex gets an opportunity to provide stable support to its liquidity at quite a high level – probably, the highest among all financial market segments.
From the Large Banks
Large banks and broker companies that specialize in currency exchange transactions can act as market makers, directly being involved in forming currency quotes for the market and ensuring around-the-clock liquidity under various currency pairs traded at Forex. The other Forex participants simply get currency quotes not being able to influence currency exchange rate.