Foreign Exchange Market

A system of private banks, foreign exchange brokers, and central banks through which households, firms, and governments buy and sell national currencies. The foreign exchange market is the most liquid financial market in the world.

The foreign exchange market assists international trade and investment by enabling currency conversion. For example, it permits a business in the United States to import goods from the European Union member states especially Eurozone members and pay euros, even though its income is in U.S. dollars.