The foreign exchange market (forex) for international currencies is the largest and most liquid market in the world. According to the Bank of International Settlements, the forex market accounts for more than $5 trillion in trading volume per day — dwarfing other markets like major stock markets.
The forex market consists of trading pairs of international fiat currencies pegged against each other where traders speculate and hedge risk on the price of a specific national currency appreciating or depreciating relative to another currency. Interestingly, there is no central forex exchange, and all trading is open 24 hours a day, more than 5 days a week, with OTC financial trading centers operating in major cities around the world.
A Brief History of the Contemporary Forex Market
The origins of money are complicated and have consistently evolved throughout human history. Money exchanging services of various currencies date back to Ancient Egypt and have continued in various forms since then. Historically, most currencies were…