Reuters  Sep 22  Comment 
China will push forward market-based reform of its currency regime and make the yuan convertible on the capital account over time, President Xi Jinping told the Wall Street Journal in an interview published on Tuesday.
The Hindu Business Line  Sep 22  Comment 
Technical forex report for Sept 22, 2015 by Veracity Financial Services
Yahoo  Sep 21  Comment 
The banks' trading revenue fell by $2.2 billion from the first quarter to $5.5 billion and 14.2 percent from the second quarter of 2014, the OCC said in a report on Monday. The OCC, an independent bureau of the U.S. Treasury Department, regulates...
Mondo Visione  Sep 21  Comment 
Hotspot, a leading institutional foreign exchange (FX) market owned and operated by BATS Global Markets (BATS), today announced the successful launch of its new London-area matching engine on 14 September with $1.2bn traded (single-count) in the...
The Economic Times  Sep 21  Comment 
At 0706 GMT, Asia-Pacific shares outside Japan were down nearly 2 percent, tracking Friday's slide in Wall Street.
The Hindu Business Line  Sep 21  Comment 
Technical forex report for September 21, 2015 by Veracity Financial Services
Reuters  Sep 19  Comment 
The International Monetary Fund welcomed Myanmar's "bold move" to liberalise its foreign exchange rules in a report published on Friday and warned that the poor Asian country would need to tighten monetary policy and reduce credit expansion.
The Economic Times  Sep 18  Comment 
India's foreign exchange reserves rose $2.359 bn in the week to September 11, halting a couple of weeks' fall, data released by RBI showed.
Euromoney  Sep 18  Comment 
The importance of foreign exchange is fast rising on the buy-side agenda, as asset managers start to question how good a deal they get on their currency trades in light of the benchmark reform after the fix scandal, according to market...


Looking for Forex Trading Strategies? Check out the Forex Trading page


Forex (FX) is short for foreign exchange and refers to the trading of one currency for another. Unlike stocks or futures, currency trading is an over-the-counter market with no central exchange.

Currencies typically trade in pairs such as the EUR/USD or USD/JPY. Currencies common to Forex tend to be the most liquid currencies such as the U.S. Dollar (USD), Japanese Yen (JPY), Euro (EUR), British Pound (GBP), Swiss Franc (CHF), Canadian Dollar (CAD), and Australian Dollar (AUD).

FOREX[1] is the world's most traded market with an average daily turnover of USD $3.2 trillion[2].

Trades occur 24 hours a day, starting Monday morning in the Asia-Pacific region and ending Friday evening in North America.

Common FX Practices

Corporate FX Programs

Many corporations who receive a significant portion of their revenue from overseas (overseas refers to any sites outside of the chartering country - "headquarters") may wish to participate in FX Hedging. This is primarily because currency volatility can majorly effect a company's stated income. A long-winded example is below.

Say Google receives more than 50% of its revenue from outside the United States. This creates a situation in which the relative strength of the U.S. Dollar (USD) can impact its financials. If the Euro (EUR) strengthens against the dollar, it has a net positive impact on Google's income statement. If EUR/USD decreases, meaning more USD can be bought with 1 EUR, then when the company calculates the value of its EUR-denominated revenue, it will see a higher than average USD amount. Forex

Retail FX

In the last several years, the Retail FX market has opened up substantially with the spread of the internet and online trading. This segment is said to occupy about 4% of all forex transactions and is growing rapidly. One of the main reasons for this phenomenon is the simplified trading platforms like TradeStation that were recently developed by innovative internet brokers, aiming to educate the lay person and help get into this lucrative market.

Example with Fake Numbers and no Transaction Costs

Let's say, for ease of demonstration, that 1 EUR = 2 USD, or that 1 Euro can purchase 2 U.S. Dollars (this is not the case, but it's easy math). Furthermore, we can claim that Google makes 1 million Euros in December 2008 in France. If Google recognizes that revenue in USD, we'd say that Google made 2 million dollars that month (from France). Suppose, however, that the Dollar strengthens against the Euro, and instead we get 1 EUR = 1.5 USD (USD appreciates, which means that 1 Euro now buys less than before). This would instead result in 1.5 million dollars for December, instead of the previous 2 million.

On your own, try seeing what would happen if the USD weakens against the Euro (1 EUR = 3 USD). This volatility is something that most companies desperately seek to avoid. One can probably see already, the more money at risk, the greater the trading activity. Vis-à-vis, the more currencies that impact revenue, the greater the trading activity. As a result, these companies engage in all sorts of Hedging practices, including using currency swaps and Derivatives (Options, Futures, and forwards), to limit their exposure to currency movement, especially for the primary currencies as listed above.

Example Currency Pairs

U.S. Dollars to Euros

Euros to U.S. Dollars

U.S. Dollars to Canadian Dollars

Canadian Dollars to U.S. Dollars

U.S. Dollars to Japanese Yen


  1. FOREX
  2. Forex 101
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