The Forex Market

The currency market is the largest market in the world. Each day more than US$2 trillion, about 100 times the daily transaction of the New York Stock Exchange, is traded in foreign exchange.

This trade in foreign exchange has a long established history, with the modern era of Forex Trading emerging in 1971 when the Bretton Woods Agreement, which pegged currencies to either the price of gold or the US dollar (which was pegged to the price of gold), was withdrawn. Financial deregulation and elimination of government controls followed in nearly all countries throughout the world.

Coupled with increasingly free international trade and major technological advances, a free floating currency exchange system drives the market today, where the values of major world currencies are independent of each other.

Around 85% of all Forex trading is investment related. Only 15% are transactions necessary for trade and commerce (the fundamental government and company currency conversion needs) related activities.