Foreign Exchange Market Essay Example | Topics and Well Written Essays - 500 words

Foreign Exchange Market - Essay Example So the more dollar exchanged the greater the value of the peso has. The value of each currency is not really fixed; it may start with a bigger value at the beginning of the day and may decrease as the day ends. The market of foreign exchange however can be analyzed in terms of supply and demand. So as mentioned in the first paragraph, the more of that currency is supplied to a country, the lower its value. So for example, when someone buys a product of a different country in their locality doesn't really deal with foreign exchange. It's the person who bought the currency of that certain country to buy that product and sell that product to their locality. So if an American buys a Japanese doll, it's the person who is selling that doll in their locality that bought yen who dealt with foreign exchange market because he will be purchasing that doll in yen and not in their own currency. That's why the more investors in your country are, with that certain currency, the lower the value of their currency is in your own country. So what are the basics in foreign exchange market First is the forex trading or what we also call as currency trading is always done in pairs.