What does FX stand for?

PIPruit

Recruit
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We all think that we know the answer. May be, let's see. So, what does FX stand for?
 

Fat Finger

Private
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FX stands for foreign exchange. It refers to the decentralized foreign exchange markets all around the world. Individuals and organizations can participate in the foreign exchange markets by buying or selling one currency against one another. Therefore, currencies in the FX market exist in pairs. For example, you buy the USD against the Japanese Yen (USDJPY) or buy the Euro against the New Zealand dollar (EURNZD).

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The FX markets include spot exchange rates, future exchange rates, and derivatives such as options contracts and swaps. It is the largest and most liquid market in the world. Trillions of dollars’ worth of currencies are exchanged daily in the forex market, according to the Bank of International Settlements (BIS).

There are many participants in the forex markets. The key participants are the central banks of various countries. They sometimes intervene in the FX market to stabilize the exchange rates of their local currencies and maintain monetary and economic stability. They often do so by conducting open market operations. Exporters and importers are also participants in the FX markets since they need to buy and sell currencies to participate in international trade, where the FX markets play a key role. Retail and institutional traders participate in the FX market to achieve their financial objectives. They sometimes speculate on the fluctuations of various exchange rates to make a profit or buy or sell currencies to hedge against fluctuations in their other positions.

More detailed information about forex market structure and participants is available in FPA Forex Course >>
 
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