The formation of the market mainly includes the following five reasons: individual entry and exit exchange, demand;
The trade demand of foreign trade enterprises;
Investment needs of financial institutions;
The need of the state to regulate and maintain stability;
The highly developed Internet and the continuous development of the international economic integration process.
Therefore, as long as there are two countries in the world, there must be.
Major players in the foreign exchange market The major players in the foreign exchange market are: central banks, commercial and investment banks;
Large multinational enterprises;
Holders of general currency.
Unlike other financial markets such as the New York Stock Exchange, the actual location of the foreign exchange market does not have a central exchange.
The foreign EXCHANGE market is known as an over-the-counter (OTC) or “interbank” market.
This is because, in fact, the entire market operates electronically, 24 hours a day, on a network between banks.
That means markets spread around the world without a central exchange.
They can appear anywhere, even on top of Mount Fuji in Japan.
The OTC foreign exchange market is by far the largest and most popular financial market in the world, with many retail investors and institutions trading globally.
In an OTC market, participants decide whom to trade with based on each other’s trading terms, the attractiveness of prices, and the reputation of counterparties.