Foreign Exchange Dealing Room - Essay Example

Till today, FOREX is the biggest financial market in the whole world. The trading between the different banks like the central banks, the large banks, the multinational corporations, the trading between governments of different countries and other financial markets takes place in the FOREX market only.According to the worldwide central banking organization which is the Bank for International Settlements, the amount of daily trading done in the forex market is more than three trillion US Dollars.

Thus the trading amount is so much that it is much larger than all of the US stock markets taken together. Here, trading from the whole world is done with or without the involvement of hard cash.The trading begins in Sydney every day and moves first to Tokyo followed by London and then New York as the business day start in every financial sector. The exchange rates are shown around the world continues on the computer.The trading takes place when any trader quotes a price for any currency on his machine, and then anyone in the world willing to trade at that particular price can reply to that message and trade.

Thus the buyer and sellers can be from any country and virtually trade with other without being present at any particular. The trading takes place between three continents which makes it possible to react or change any decision by any trader regarding his trading activity any event or activity. The value of a particular currency relative to other currencies is influenced by many factors but the main factor affecting it is pure supply and demand of the market. If the demand rises or supply falls, it results in price rise or price fall respectively.

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