Foreign Exchange Market

The foreign exchange (currency or forex or FX) market exists wherever one currency is traded for another. It is by far the largest financial market in the world, and includes trading between large banks, central banks, currency speculators, multinational corporations, governments, and other financial markets and institutions. The average daily trade in the global forex and related markets currently is over US$ 3 trillion.Retail traders (individuals) are a small fraction of this market and may only participate indirectly through brokers or banks, and might be subject to forex scams.

Currency

A currency is a unit of exchange, facilitating the transfer of goods and/or services. It is one form of money, where money is anything that serves as a medium of exchange, a store of value, and a standard of value. A currency is the dominant medium of exchange. To facilitate trade between currency zones, there are exchange rates, which are the prices at which currencies (and the goods and services of individual currency zones) can be exchanged against each other. Currencies can be classified as either floating currencies or fixed currencies based on their exchange rate regime. In common usage, currency sometimes refers to only paper money, as in coins and currency, but this is misleading. Coins and paper money are both forms of currency.

Currency Pair

A currency pair depicts a quotation of two different currencies. The first currency in the pair is the base currency or transaction currency. The second currency in the pair is labelled quote currency, payment currency or counter currency. Such a quotation depicts how many units of the counter currency are needed to buy one unit of the base currency.

Dollar

The dollar (often represented by the dollar sign: "$") is the name of the official currency in several countries, dependencies and other regions.

Rhodesian Dollar

The dollar (R$) was the currency of Rhodesia between 1970 and 1980. It was subdivided into 100 cents.

Jamaican Dollar

The dollar (currency code JMD) has been the currency of Jamaica since 1969. It is normally abbreviated with the dollar sign, $, or, alternatively, J$ or JA$ to distinguish it from other dollar-denominated currencies. It is divided into 100 cents.

Cayman Islands Dollar

The dollar (currency code KYD) is the currency of the Cayman Islands. It is normally abbreviated with the dollar sign $, or alternatively CI$ to distinguish it from other dollar-denominated currencies. It is subdivided into 100 cents. It is the 10th highest valued currency unit in the world and the highest valued dollar unit.

East Caribbean Dollar

The East Caribbean dollar (currency code XCD) is the currency of eight of the nine members of the Organisation of Eastern Caribbean States. It has existed since 1965 and is normally abbreviated with the dollar sign $ or, alternatively, EC$ to distinguish it from other dollar-denominated currencies. The EC$ is subdivided into 100 cents. It has been pegged to the United States dollar at US$1 = EC$2.7 since 1976. Because of this relatively low exchange rate and the inherent physical similarities, the 25 cent coin has been used by fraudsters in Canada in place of the Canadian quarter.

Barbadian Dollar

The dollar has been the currency of Barbados since 1882. The present dollar has the ISO 4217 code BBD and is normally abbreviated with the dollar sign "$" or, alternatively, "Bds$" to distinguish it from other dollar-denominated currencies. It is divided into 100 cents.

Zimbabwean Dollar

The dollar is the currency of Zimbabwe. It is subdivided into 100 cents. It is normally abbreviated with the dollar sign $, or alternatively Z$ to distinguish it from other dollar-denominated currencies.

New Zealand Dollar

The dollar (currency code NZD) is the currency of New Zealand. It also circulates in the Cook Islands (see also Cook Islands dollar), Niue, Tokelau, and the Pitcairn Islands.

Brunei Dollar

The ringgit Brunei (Malay) or the Brunei dollar (English, currency code: BND), has been the currency of the Sultanate of Brunei since 1967. It is normally abbreviated with the dollar sign $ and is divided into 100 sen (Malay) or cents (English).

Spanish Dollar

The Spanish dollar (also known as the piece of eight, the real de a ocho, or the eight real coin) is a silver coin, worth eight reales, that was minted in the Spanish Empire after a Spanish currency reform of 1497. It was legal tender in the United States until an Act of the United States Congress discontinued the practice in 1857. Through widespread use in Europe, the Americas and the Far East, it became the first world currency by the late 18th century. Many existing currencies, such as the Canadian dollar, United States dollar and the Chinese yuan, as well as currencies in Latin America and the Philippines peso were initially based on the Spanish dollar and other 8 reales coins.

Straits Dollar

The Straits dollar was the currency used in the British colonies and protectorates in Malaya and Borneo, including the Straits Settlements until 1939.

Sarawak Dollar

The dollar was the currency of Sarawak from 1858 to 1953. It was subdivided into 100 cents. The dollar remained at par with the Straits dollar and its successor the Malayan dollar, the currency of Malaya and Singapore, from its introduction until both currencies were replaced by the Malaya and British Borneo dollar in 1953.During the Japanese occupation period (1942-1945, paper money was issued in denominations ranging from 1 cent to 1000 dollars. This currency was fixed at 1 dollar = 1 Japanese yen, compared to a 1:2 pre-war rate. Following the war, the Japanese occupation currency was declared worthless and the previous issues of the Sarawak dollar regained their value relative to sterling (two shillings four pence).

Malaya and British Borneo Dollar

The Malaya and British Borneo dollar was the currency of Malaya, Singapore, Sarawak, British North Borneo and Brunei from 1953 to 1967. Malaya continued to use this currency after independence in 1957 and the formation of Malaysia in 1963, as did Singapore after its independence in 1965.

Hong Kong Dollar

The Hong Kong dollar (ISO 4217 code: HKD) is the currency of Hong Kong. In English, it is normally abbreviated with the dollar sign $, or alternatively HK$ to distinguish it from other dollar-denominated currencies. The dollar is subdivided into 100 cents or 1000 mils.

Australian Dollar

The Australian dollar is currently the sixth-most-traded currency in world foreign exchange markets (behind the the euro,U.S. dollar, the yen, the pound sterling, and the swiss franc), accounting for approximately 4–5% of worldwide foreign exchange transactions. The Australian dollar is popular with currency traders due to relatively high interest rates in Australia, the relative lack of government intervention in the foreign exchange market, the general stability of the economy and the government, as well as the prevailing view that it offers diversification benefits in a portfolio containing the major world currencies (especially because of its greater exposure to Asian economies and the commodities cycle).

Canadian Dollar

The dollar (ISO 4217 code: CAD) is the currency of Canada. It is normally abbreviated with the dollar sign $, or C$ to distinguish it from other dollar-denominated currencies.It is divided into 100 cents.

United States Dollar

The dollar (currency code USD) is the unit of currency of the United States. The U.S. dollar has also been adopted as the official and legal currency by the governments in a few other countries. The U.S. dollar is normally abbreviated as the dollar sign, $, or as USD or US$ to distinguish it from other dollar-denominated currencies and from others that use the $ symbol. It is divided into 100 cents.

Cent Currency

In currency, the cent is a monetary unit that equals 1/100 of various countries' basic monetary units. The word also refers to the coin which is worth one cent.

Denomination Currency

Denomination is a proper description of a currency amount, usually for coins or banknotes. Denominations may also be used with other means of payment like gift cards.

Hard Currency

Hard currency or Strong Currency, in economics, refers to a currency in which investors have confidence, such as that of a politically stable country with low inflation and consistent monetary and fiscal policies, and one that if anything is tending to appreciate against other currencies on a trade-weighted basis. The term can also be used to refer to a currency backed by a precious metal such as gold or silver, where the supply of that precious metal is not easily able to be increased.

Fiat Currency

In economics, fiat currency or fiat money is money backed by an authority, usually a government, for use in exchange of goods and services or to pay a debt, e.g tax. Unlike representative money, fiat money is not convertible to specie.Fiat money is a form of money backed by the good credit of the issuing authority, which could be a government, bank, or other organization. The value of the money is based primarily on the faith that the money will remain relatively stable in value, continue to be accepted as a means of exchange, and will be accepted by creditors. Of particular relevance is its acceptability as payment of debts to the government, such as taxes. The term “fiat” money is also often used to distinguish it from representative money, which is pegged or fixed to a quantity or mass of precious metal. While representative money is often associated with a legal requirement that the bank of issue pay in fixed weights of a given precious metal or (in theory) fixed amount of any other precious good, fiat money generally has no inherent value. Instead, it derives its value as a medium for exchange when traded for goods or services or to pay debts.

Digital Gold Currency

Digital gold currency (or DGC) is a form of electronic money denominated in gold weight. The typical unit of account for such currency is the gold gram or the troy ounce, although other units such as the gold dinar are sometimes used. DGCs are backed by gold through unallocated or allocated gold storage.

Digital gold currencies are issued by a number of companies, each of which provides a system that enables users to pay each other in units that hold the same value as gold bullion. These competing providers issue independent currency, which normally carries the same name as their company. In terms of the most popular providers, e-gold has the greatest number of users and GoldMoney holds the greatest quantity of bullion (as of January 2007).

Alternative Currency

Alternative currency is a term that refers to any currency used as an alternative to the dominant national or multinational currency systems (usually referred to as national or fiat money). Alternative currencies can be created by an individual, corporation, or organization, they can be created by national, state, or local governments, or they can arise naturally as people begin to use a certain commodity as a currency. Mutual credit is a form of alternative currency, and thus any form of lending that does not go through the banking system can be considered a form of alternative currency.

Complementary Currency

Complementary community currencies describe a wide group of currencies or scrips designed to be used in combination with standard currencies or other complementary currencies. They can be valued and exchanged in relationship to national currencies but also function as media of exchange on their own. Complementary currencies lie outside the nationally defined legal realm of Legal tender and are not used as such. Rate of exchange, scope of circulation and use in combination with other currencies differs greatly between complementary currency systems, as is the case with national currency systems.

World Currency

In the foreign exchange market and international finance, a world currency or global currency refers to a currency in which the vast majority of international transactions take place and which serves as the world's primary reserve currency.

Soft Currency

Soft currency indicates a type of currency whose value may depreciate rapidly or that is difficult to convert into other currencies. It is generally less desirable than hard currency to users. Soft currency can be in the form of paper, electronic or debt-based "IOUs" which have in the past been used in place of hard currency.

Floating Currency

A floating currency is a currency that uses a floating exchange rate as its exchange rate regime. A floating currency is contrasted with a fixed currency.

A floating currency is one where targets other than the exchange rate itself are used to administer monetary policy. See open market operations.

Reserve Currency

A reserve currency (or anchor currency) is a currency which is held in significant quantities by many governments and institutions as part of their foreign exchange reserves. It also tends to be the international pricing currency for products traded on a global market, such as oil, gold, etc.

Private Currency

A private currency is a currency issued by a private institution. It is often contrasted with fiat currency issued by governments.

many countries, the issue of private paper currencies is severely restricted by law. However, in Scotland and Northern Ireland private sector banks are licensed by the government to print their own paper money.

there are several privately issued electronic currencies in circulation, such as digital gold currency, that function as money. Transactions in these currencies represent an annual turnover value in billions of US dollars.

Liberty Dollar

The Liberty Dollar is a private currency embodied in minted metal pieces (referred to as rounds) and gold and silver certificates (ALD), and electronic currency (eLD). ALD certificates are warehouse receipts for real gold and silver owned by ALD certificate holders, warehoused at the Sunshine Mint in Coeur d'Alene, Idaho. The Liberty Dollar is distributed by Liberty Services (formerly known as NORFED), based in Evansville, Indiana. It was created by Bernard von NotHaus, the co-founder of the Royal Hawaiian Mint Company.

The Liberty Dollar warehouses were raided and the contents confiscated by the US government (FBI & Secret Service) on 15 November 2007. The government states this confiscation is intended to prevent people mistaking Liberty Dollars for legal tender; the Liberty Dollar organisation are accused of illegally presenting the currency as a legal alternative to the United States dollar.