Individuals and businesses trade currencies whenever goods are bought and sold abroad. Thus, a currency exchange market has developed around these practices, with hedging practises used for volatile trading periods. The foreign exchange is historically centred on the large central banks, large financial houses, and multinational business corporations. However with the advent of independent currency traders like us at Pure FX, the practice has extended to small businesses and even individuals. These small traders are having a significant effect on the foreign currency exchange market.
The foreign exchange is the world’s largest financial trading place, with figures in the region of $3 trillion being bought and sold each day. The New York Stock Exchange, by contrast, trades a miserly average of $70 billion per day – even though it is the world’s largest equity market.
This makes foreign currency trading easily the most efficient and liquid trading platform available. The sheer size of the volumes traded offers a buffer, meaning it’s practically impossible for one individual or organisation to affect the currency exchange rate through trading on the open market. No individual company has the resources needed to affect the foreign exchange rate through market trading alone. However governments, banking systems and large organisations can collectively affect foreign exchange rates, so the market has to be watched carefully.
At Pure FX we trade in at least 20 currencies. However, most foreign exchange trading revolves around just seven: the US dollar, the Euro, the Yen, the GP Pound, the Swiss Franc, the Australian dollar and the Canadian dollar.
By examining foreign exchange trends and events carefully, we at Pure FX can get our clients the best possible rates on their currency exchanges.
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