Legal Definitions - foreign-exchange market

The foreign-exchange market is a place where different currencies are traded internationally. This market can take the form of spot, futures, and options markets. In simpler terms, it is a place where people can buy and sell different currencies from around the world.

For example, if someone from the United States wants to buy something from a seller in Japan, they will need to exchange their US dollars for Japanese yen. This exchange will take place in the foreign-exchange market, where the buyer and seller will agree on a price for the exchange.

Another example is when a company in Europe wants to invest in a business in the United States. They will need to exchange their euros for US dollars to make the investment. This exchange will also take place in the foreign-exchange market.

The foreign-exchange market is important for international trade and investment because it allows people and companies to exchange different currencies and make transactions across borders.