The foreign exchange market, sometimes called foreign exchange market and globally known as the FOREX (Foreign Exchange Market) is the second largest market in terms of volume traded, behind the market interest rates and far ahead of the award.
Every day, more than 2000 billion dollars that are exchanged. Indirectly, almost everyone plays a role in the Forex market. Simply buy or sell a product abroad. A product purchased in the United States by a Frenchman will be settled in dollars, then charged to his account by his bank in Euros. The bank will it bought dollars and sold euros. This operation has made changes at a rate set on the foreign exchange market, known as the FOREX. The fact that the French bank wants to buy dollars and sell the euro appreciates the value of the dollar. The dollar is requested. So, on the FOREX market, the exchange rate against USD EUR will increase. There is demand on the dollar, and a desire to get rid of the euro ...
In practice, the previous transaction will not wriggle the FOREX. But the principle in the foreign exchange market is exactly the same with huge sums. Above all, unlike the exchange rates displayed in banks, on the FOREX, USD / EUR 18,000 times vary by day.
In this variation the permanent born speculation. For example, we can buy a dollar at a rate t. And later resell them at a different rate. If the dollar has risen, so we made a profit by the mere fact of converting one currency into another, and then converted the other in the first currency.These conversions are happening in the market for foreign currency or foreign exchange market called Forex.