Foreign exchange

The foreign exchange market will exists wherever one currency is traded for another currency in the particular country. It is by far the largest market in the world, in terms of cash value traded, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. Retail traders are a small part of this market. They may only participate indirectly through brokers or banks and may be targets of forex scams.

There is no single unified foreign exchange market. Due to the over-the-counter (OTC) nature of currency markets, there are rather a number of interconnected marketplaces, where different currency instruments are traded. This implies that there is no such thing as a single dollar rate rather than a number of different rates , depending upon what bank or market maker is trading. In practice the rates are often very close, otherwise they could be exploited by arbitrageurs.The interbank market for both the majority of commercial turnover and large amounts of speculative trading every day. A large bank may trade billions of dollars daily. Some of this trading is undertaken on behalf of customers, but much is conducted by proprietary
desks, trading for the bank's own account.