Foreign exchange – currencies

What is foreign exchange?

All present claims on foreign currencies in the form of credit balances or cheques are referred to as foreign exchange. Foreign cash in the form of notes or coins is referred to as banknotes. The most important currency exchanges are located in New York, London, and Tokyo, where exchange rates are determined on the basis of supply and demand.

What is forex trading?

The term of forex trading simply means foreign exchange trading. Forex (foreign exchange market) is the largest and most liquid market in the world, where a currency pair is always traded. The most important ones include the US dollar, euro, and Japanese yen, with the Australian dollar, New Zealand dollar, and British pound also drawing the attention of many traders. Forex trading can be performed in the scope of day trading or for medium to longer-term periods.

What is an exchange rate?

An exchange rate is the ratio of two currencies, the price of which is determined by supply and demand on the foreign exchange market.

The foreign exchange market, also referred to as forex, is the largest financial market in the world.

In contrast to securities, exchange rates/foreign exchange rates are not regulated by an exchange but are traded directly, which is why they are the most liquid and, due to their almost uninterrupted tradability, also the most flexible trading instrument for traders.

What is the ISO code?

The ISO code has three letters. It refers to the identifier of the various international currencies. The first two letters are the country code and the third one stands for the national currency.