Forex Market and Its Big Players

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The Forex market is undoubtedly the largest financial market in the entire world. Due to the great trading volume, the currency market is a preferred choice for traders. It is valued at approximately 3 trillion dollars per day which are traded. Such big volume trade is conducted by numerous investors, traders, companies and institutions; all having different intentions.

If every one is making business and profits then who are the big players of the foreign exchange market? Central banks certainly are the biggest players. Central banks also work with a purpose in Forex trading as the U.S Federal Bank keeps the economy and currency rates steady. They fulfill the purpose with the help of taking interest rate decisions and by trading the currency market. The market and specifically central banks take an active part in order to maintain and stabilize their currency and to establish enough foreign currency reserves.

Not only the central but commercial banks are also taking keen interest in the currency market.  Commercial banks mainly perform trade with the help of other traders. This is specifically performed to exchange currencies as per their clients’ requirements. Commercial banks are also involved in trading currencies on the Forex market for generating their own profits, income and speculations particularly. Banks performs the prediction task when they become confident that a currency will rise over another. They perform substantial trade to ensure making profit out of it. Since commercial banks are involved in controlling money worldwide they become big players of the foreign exchange market.

After traders and investors, the most important players are importers and exporters. Since various institutes and industries work with foreign countries, they are also dealing with different currencies worldwide. Though, their center of action is the market and they do so in order to exchange money (exchange of their currency with their client’s currency). Importers and exporters also use the market to hold an exchange rate and to have absolute guaranteed profits on it. This also minimizes impact of fluctuations upon exchange rates. This means guaranteed profits generation upon a currency.

Private speculators which include non-regulated institutions, private citizens and hedge funds are also among the big players of the Forex market. Generally the purpose of private speculators is to make profits for their own sake or for their client’s demand. They are not interested in investing in the money market for the sake of stabilizing an economy or to enhance trading. Commercial banks mainly carry their trades.

The Forex market deals with a variety of investors, institutions, traders, organizations and banks. The giant groups of these respective categories are likely to dominate the market in the future. As commercial banks and private speculators are taking part in the market, the situation has reached an interesting point. All are seeking profits to serve different purposes and needs.

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