What Is Forex? How the Global Currency Market Works
Every time money changes from one currency to another — a holiday, an import, a wire transfer — it passes through the foreign-exchange market, or “forex.” It’s the largest, most liquid market in the world, trading trillions of dollars a day.
There’s no single exchange
Unlike a stock exchange, forex has no central building. It’s a global network of banks, companies, funds and brokers trading directly with each other, around the clock, five days a week. When Tokyo sleeps, London and New York keep trading.
Currencies trade in pairs
You never buy a currency in isolation — always one against another, like EUR/USD or GBP/USD. The price is how much of the second currency it takes to buy one unit of the first. When you “buy EUR/USD,” you’re buying euros and selling dollars at the same time.
Who’s trading, and why
Most volume isn’t speculation — it’s businesses paying overseas suppliers, tourists exchanging money, and companies hedging. On top sits a layer of traders betting on rate moves driven by interest rates, inflation and news, as covered in how exchange rates work.
What you actually see
The rate on the news is the mid-market rate — the wholesale midpoint. Consumers get a slightly worse rate once a margin is added. Our converter shows the mid-market rate so you always know the true baseline.