The foreign exchange market is the biggest, most dynamic and most liquid capital market in the world. Also known as the forex market, the average daily turnover is around US$4 trillion a day which is about 20 times bigger than the daily turnover of the New York Stock Exchange. In fact the daily volume is currently 6-8 times the daily turnover of all the sharemarkets around the world combined. In the forex market you can buy and sell one nations currency for another such as buying the New Zealand dollar versus the United States dollar. The foreign exchange market is simply a free market of all the world’s currency’s on a floating exchange rate therefore it is not centralised such as the much smaller sharemarkets around the world. Transactions are interbank and over the counter.
The Forex market although dominated by all types of banks whether it be commercial banks, investment banks and contral banks, along large multi national companies simply needing to do business with another country has become open with technology. The market is growing with , global money managers, registered dealers, international money brokers, futures and options traders, and private speculators.