MEANING: The foreign exchange market is a marketwhere foreign currencies are bought and sold.Ex:if an Indian importer imports goods from USAand has to make payments in US dollars.
The purpose of FOREX is to help internationaltrade and investment.
A FOREX market helps business convert onecurrency to another.
In a typical foreign exchange transaction aparty purchases a quantity of one currency bypaying a quantity of another currency.
The foreign exchange market started formingduring the 1970s.
The FOREX is unique because of:--Its trading volumes-The extremely liquidity of the market-Its geographical dispersion-Its long trading hours ,24hours a day-The low margins of profit compared withother market or fixed income. but profits canbe high due to very large trading volumes.