Definition
foreign exchange
Origin and usage
An early type of forex market which allowed people to barter foreign currencies was established in 17th century Holland. By 1928 the abbreviated term forex had entered common usage, and London was one of the first modern cities where traders could buy and sell foreign currencies for profit, thereby establishing the present-day forex market.
Examples
Used as a noun, forex refers to the foreign currency market. This is the largest trading market in the world and covers every available currency. Traders around the globe buy or sell currencies according to supply and demand. Forex trends are influenced by the stability and economic wealth of each country, along with other factors. Events on the forex market alter the exchange rate between different currencies.
In 2005 banks including Barclays, UBS and Citi were fined by financial regulators because some of their traders had influenced the forex market for personal gain. Calling themselves The Cartel this group of traders, who were employed by various banks, planned to influence forex rates and make a profit for themselves. This took place between 2007 and 2013, but it was not publicly known until the Swiss bank UBS found evidence of forex rigging in 2015.
Quotations
“China is definitely setting the tone for forex markets at the moment, we were in risk-off mode for the last couple of days. The big question is, are the measures that China has taken sustainable given that most stocks are not tradable at the moment?”
(Thu Lan Nguyen)
“The rouble is rising ahead of tomorrow’s tax payments, on account of big volumes (of forex) for sale and an absence of forex buyers.”
(Pavel Demeshchuk)
Synonyms
FX
View the full definition in the Macmillan Dictionary.
