What Is Foreign Exchange (Forex)?
Foreign Exchange (forex or FX) is the trading of one currency for another. For example, one can swap the U.S. dollar for the euro. Foreign exchange transactions can take place on the foreign exchange market, also known as the forex market.
The forex market is the largest, most liquid market in the world, with trillions of dollars changing hands every day. There is no centralized location. Rather, the forex market is an electronic network of banks, brokers, institutions, and individual traders (mostly trading through brokers or banks).
Understanding Foreign Exchange
The market determines the value, also known as an exchange rate, of the majority of currencies. Foreign exchange can be as simple as changing one currency for another at a local bank. It can also involve trading currency on the foreign exchange market. For example, a trader is betting a central bank will ease or tighten monetary policy and that one currency will strengthen versus the other.
When trading currencies, they are listed in pairs, such as USD/CAD, EUR/USD, or USD/JPY. These represent the U.S. dollar (USD) versus the Canadian dollar (CAD), the euro (EUR) versus the USD, and the USD versus the Japanese yen (JPY).
How Does a Forex Account Work?
A forex trading account is something like a bank account where you can purchase currencies and hold them. Currencies are specifically purchased in pairs. If you buy the EUR/USD, you are holding for the US dollar to become worth less per euro over time. The euro must become worth more money in dollars for you to make a profit.
A forex brokerage offers you a way to get into the mix with the banking network and purchase a currency pair to hold in an easy manner. Before there were forex brokers, people wishing to trade in foreign currency needed to have a large amount of money and a special relationship with a bank to buy foreign currencies.
Why Work With Reliant Forex Partners?
Our company offers you true peace of mind. Our financial advisors work to maintain transparency at all times so that you are able to safely and effectively transfer your money between counties without taking a hit to your bottom line. Since exchange rates are not regulated by any governing body, we have made it our focus to monitor our clients’ forex rates and deliver fair, transparent pricing and reporting. Our commitment to transparency is unprecedented in the forex trading industry and is what truly sets up apart from our competition.
Houston Forex Services
Reliant Forex Partners is a Houston-based Forex Payments Consulting Firm delivering hands-on FX payments solutions for our corporate treasury clients. We offer an impressive portfolio of international payments consulting services that are completely customizable to your business. Whatever your FX payments needs may be, we are at your service. Get in touch with us today.
Reliant Forex Partners
866-398-1330
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