foreign-exchange market

foreign-exchange market
An international market in which foreign currencies are traded. It consists primarily of foreign-exchange dealers employed by commercial banks (acting as principals) and foreign-exchange brokers (acting as intermediaries). Although tight exchange controls have been abandoned by many governments, including the UK government, the market is not entirely free in that it is to some extent manipulated by governments. Currency dealing has a spot market for delivery of foreign exchange within two days and a forward-exchange market (see forward-exchange contract) in which transactions are made for foreign currencies to be delivered at agreed dates in the future. This enables dealers, and their customers who require foreign exchange in the future, to hedge their purchases and sales. Options and futures on forward-exchange rates can also be traded on various world markets, both over-the-counter (OTC) and on exchanges.

Big dictionary of business and management. 2014.

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