Foreign exchange trading involves the exchange of one country’s currency to that of another country. For the trade to take place, the currency must be converted into the foreign currency that is acceptable in the foreign exchange market services. The foreign exchange market involves the trading of large commercial banks in financial hubs that trade foreign currency in terms of deposit with one another.
The foreign exchange market is the trade involving currencies. This is the most comprehensive financial market in the globe where billions are traded daily. The great thing about the foreign exchange market is that you can trade irrespective of where you are. The currency trading runs for 24 hours a day daily, excluding weekends, with primary currencies being exchanged in every major financial hub. Forex trading involves buying and selling of currencies concurrently. The value of the base currency is based on the value of the counter currency. The rate at which the base currency is traded for the counter currency is referred to as the foreign exchange rate.
Here are the foreign exchange market services
The currency market is one of the markets contained in the foreign exchange market. This trade takes place between countries, and the currency dealers usually determine the trading rates. The currency market is no different from the bond market since it features an interdealer market platform where dealers can trade amongst themselves.
The retail market is the other type of market offered in the foreign exchange market. It was launched in the 1970s, and the numbers of traders have kept increasing since then. The number of traders taking part in this trading platform is higher than that of Interbank Market. The retail market is not much involved when it comes to influencing rates, unlike other market platforms.
The interbank market is a marketing platform for banks to trade currencies amongst themselves. Every bank has its trading desk known as the dealing desk. They are always in touch with one another. This ensures there is no variation in exchange rates across the globe.