The forex market operates as an over-the-counter (OTC) market. This means that transactions are conducted electronically between participants rather than through a centralized exchange.

The main participants in the forex market include:

• Central banks managing national monetary policy
• Commercial banks handling large currency transactions
• Corporations conducting international business
• Investment funds and financial institutions
• Retail traders trading through online brokers

Prices in the forex market are determined by supply and demand. When more market participants want to buy a currency than sell it, the currency’s value increases. When selling pressure is stronger, its value decreases.

Currency prices are influenced by many factors, including:

• Interest rate changes
• Economic data releases
• Inflation levels
• Political stability
• Market expectations and sentiment

Because of its global nature, the forex market remains active nearly 24 hours a day during the trading week.