Anfernee Yu Jeco

FIN-023 BAFM41S1

Assignment 4.1 FX and Globalization

Write three (3) paragraphs and discuss the role of the Foreign Exchange Market in
Globalization.

Globalization is the spread of products, technology, information, and jobs across

nations. In economic terms, it is the growing interdependence of the world’s economies,
cultures, and populations fostered through cross-border trade in goods and services,
technology, and flows of investment, people, and information. Foreign Exchange Market or
commonly known as forex, is an over-the-counter global marketplace that determines the
exchange rate for currencies around the world. Participants in these markets are allowed to
buy, sell, exchange, and speculate the relative exchange rate of various currency pairs.

The foreign exchange market is the world’s largest financial market where trillions are
traded daily. Among all the markets in the financial world forex is the most liquid. Moreover,
there is no central marketplace for the exchange of currency in the forex market. It is an OTC
market and is comprised of a global network of financial centers that transact 24 hours a day,
closing only on the weekends. Forex play a critical role in facilitating cross-border trade,
investment, and financial transactions. These markets allow firms making transactions in
foreign currencies to convert the currencies or deposits they have into the currencies or
deposits they want. Most transactions are handled by foreign exchange dealers. The
importance of foreign exchange markets has grown with increased global economic activity,
trade, and investment, and with technology that makes real-time exchange of information and
trading possible.

In conclusion, there is a reason why forex is the largest market in the world in which it
empowers everyone from central banks to retail investors to potentially see profits from
currency fluctuations related to the global economy. Also, the market is open 24 hours a day,
you can trade at any time of day, which means there's no cut-off time to be able to participate
in the market.

“I affirm that I have not given or received any unauthorized help on this assignment and
that this work is my own.”