Foreign exchange trading is the buying and selling of foreign against
domestic book money or other currency means, for example Bank deposits,
exchange or cheques, not banknotes or coins (varieties). On the foreign
exchange market (Forex), supply and demand for currency and
exchange rates are found to which the trade. There are foreign exchange
spot trading, where the swaps immediately met, and the foreign exchange
futures trading, where the deal is an exchange rate fixed, but the
operation in the future.
The Bank for International Settlements identified the regular
turnover on the global foreign exchange markets (spot and futures
market). In April 2004, the global foreign exchange market turnover per
day at around 1880 billion U.S. dollars. In 1992, there were - adjusted
for exchange rate changes - or 840 billion U.S. dollars. Estimated that
for one year (with 250 trading days) gives the sales of 470,000 billion
U.S. dollars. In relation to the value of the annual global exports of
goods and services of over 11,000 billion U.S. dollars in 2004, the
global foreign exchange market turnover is very high.
The currency composition is from the graphic. The U.S. dollar
clearly dominates with a share of all currency transactions of over 44
percent. The Euro is coming to a share of almost 19 percent.
Against this background and with a view to temporarily currency
crises occurring is sometimes criticized the large size of the global
foreign exchange trading was mainly by a destabilizing speculation.
Many foreign exchange market transactions, however, have the opposite
risk-hedging to be done. For example, many export trade or investment
on the foreign exchange futures markets against currency fluctuations
secured. In addition, the banks also move at the international level
greater financial positions (such as credit risk or currency
transactions) to other business partners, because they better match
their risk calculations. In addition, such as an exchange of two not
directly traded currencies - such as the Mexican peso and the Czech
crown - several transactions necessary to some of the dollar and euro,
finally, the one currency to another. In consequence follow any
cross-border trading activities between enterprises has been estimated
by the International Monetary Fund six to ten transactions between
banks.



