Foreign Exchange Financial Market

Here are the features that make this market different from all other sectors of the world financial system:

- It has a high sensibility to a large and continuously changing number of factors or world events

- It is accessible to all traders in the major currencies

- It guarantees the quantity and the liquidity of the major currencies

- It considers several currencies

- It enjoys of a round-the clock business hours which enable worldwide traders to find markets open 24/7, 365 days a year, and

- It enjoys of an extremely high efficiency compared to other financial markets

Let’s take a look at its historical perspective…

Currency trading can be traced back to the ancient Middle East and Middle Ages... read more...

The process of the development of foreign exchange activities goes as follows:

- The signing of the Bretton Woods Accord

- The constitution of the International Monetary Fund (IMF)

- The emergence of the free-floating foreign exchange markets

- The creation of currency reserves

- The constitution of the European Monetary Union and the European Monetary Cooperation Fund, and

- The introduction of the Euro as a currency

Some of the factors that caused the growth in the volume of the foreign exchange activities were:

- The volatility of the currencies

- The volatility of the interest rates

- Business internationalization

- The increase of the corporate interest

- The increase of the traders’ sophistication

- The developments in technology (telecommunications, computers and programming)

And this is just the beginning...

Click on the link below to learn more of what foreign exchange is all about.

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