What Is The Foreign Exchange Market?

Foreign exchange market is also known as currency or forex market. It is the market where currency is traded. Like stock market, Foreign exchange market does not have physical existence. When the banks and the other financial institutions conduct buying and selling of foreign currencies then it is known as Foreign exchange market. When one institution buys or sells one currency in exchange of another currency then it is known as Foreign exchange. The Foreign exchange market was developed in 1970s when floating exchange rate was introduced in the world. Most importantly, because of the demand and supply of currencies in Foreign exchange market, the value of currencies or exchange rates are determined.