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The foreign exchange market is one of the biggest objectives of many investors and speculators, but there is much more behind one of the largest markets in the world.
It is the place par excellence where currencies are exchanged for different purposes, such as international trade, investment or payment for services abroad.
What is a currency?
Una currency It is a monetary unit used in a region or in a foreign country, that is, external or foreign to our country of origin.
As part of international trade, currencies are exchanged in the international money market, and on these tours and operations, their price may fluctuate, taking into account that other currencies also operate.
However, if the central bank of a given country sets a fixed exchange rate, the price of that currency will be set in relation to other currencies.
What is the foreign exchange market?
As a result of the exchange of currencies, the foreign exchange market. This is a decentralized market in which currencies are traded, worldwide. It is known by the name of Forex (Foreign Exchange Market), or Currency Market (Foreign exchange market).
In the foreign exchange market, they can be purchased as an investment or as a means of payment abroad.
In order to maintain its main feature of being decentralized, there is no single quote for a given currency.
How is buying and selling currencies?
La buying and selling currencies It is a financial transaction that is currently widely used by investors, since the foreign exchange market is the financial market with the highest growth projection in the world.
The purchase and sale of currencies is carried out by peers, that is, exchangeable currencies are offered in pairs, and therefore, the value of the first currency is calculated, which is called base currency.
What is currency exchange called?
Foreign exchange is the name given to the operation of exchanging one local currency to another. When making payments abroad or a person travels abroad, they need to exchange currencies in order to be able to manage in the currency of that country or in the second most traded currency.
Foreign exchange is stipulated by the exchange rate established in Forex or by the monetary policies of the country in which the process is taking place.
What are the strongest currencies in the world?
Although, the The U.S. dollar is the most traded currency in the foreign exchange market, this It doesn't make it the strongest currency of the world, but it stands out for being a reference currency, with a high value and a certain stability compared to other currencies.
The strongest currency in the world today comes from Kuwait, a country with a lot of oil. It's about the Kuwaiti Dinar (KWD), which has a value equivalent to $3.27. This currency is followed by:
- Bahraini Dinar
- Omani Rial
- Jordanian Dinar
- British Pound
- Cayman Islands dollar
- Swiss franc
- Euro
- USD
- Canadian dollar.
