What is currency exchange?

Currency exchange of this kind is one of the demand factors for a particular currency. Foreign exchange, also known as forex, is the conversion of one country's currency into another. The value of any particular currency is determined by market forces related to trade, investment, tourism, and geopolitical risk.

What is foreign exchange trading?

Foreign exchange, or forex, is trading one currency for values equivalent to another currency. The trading occurs between currency pairs. The foreign exchange rate fluctuates often and the supply and demand factors in the market determines it. The platform where this exchange occurs is the foreign exchange market.

What is the main function of an exchange?

The core function of an exchange is to ensure fair and orderly trading and the efficient dissemination of price information for any securities trading on that exchange. Exchanges give companies, governments, and other groups a platform from which to sell securities to the investing public.

How do currency exchanges make money?

Currency exchanges make money by charging a nominal fee and through the bid-ask spread in a currency . Also known as a "bureau de change" or "casa de cambio," a currency exchange should not be confused with the foreign exchange (forex) market where traders and financial institutions transact in currencies.