1. Introduction
The spot market accounts for nearly a third of global foreign exchange turnover. It can be broadly divided into two tiers:
The spot market accounts for nearly a third of global foreign exchange turnover. It can be broadly divided into two tiers:
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The interbank market where currency is bought and sold for delivery and settlement within two days, with the banks acting as " wholesalers" or "market makers".
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The retail market made up of private traders, who deal over the telephone or the internet through intermediaries (brokers).
The forex market has no centralised exchanges. All
trades are over-the-counter deals, agreed and settled by individual
counterparties known to one another. The forex market is truly global
and operates 24 hours a day, Monday to Friday. Daily trading commences
in Wellington, New Zealand and follows the sun to (inter alia) Sydney,
Tokyo, Hong Kong, Singapore, Bahrain, Frankfurt, Geneva, Zurich, Paris,
London, New York, Chicago and Los Angeles before starting again.
