In 2023
A foreign exchange rate is the price of the domestic currency stated in terms of different currency. Forex exchange, also known as Forex trading or currency trading, plays a vital role in global economies. In other words, a foreign exchange rate compares one currency with another currency to show their relative values. Forex exchange refers to the buying and selling of currencies on the foreign exchange market. Since standardized currencies around the world float in value with supply, demand and consumer confidence, its values change relatively to each over time. For example, one US dollar in 2020 was worth about 0.68 Euros. In 2023, one US dollar is worth 0.75 Euros. This means the dollar has increased its value over three-year span, but the Euro is still 25% more valuable.
The forex market is the biggest, highly liquid market in the world, with trillions of dollars changing every day. There is no centralized location, rather ‘the forex market is an electronic network of banks, brokers, institutions, and individual traders (mostly trading through brokers or banks). Participants in the Forex market include individuals, financial institutions, corporations, and governments.
