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Foreign Exchange Markets and International Business

What are the purposes of the foreign exchange market? Also, how is the FOREX used to raise capital by international businesses?

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The Foreign Exchange Market

With international trade, the currency of one country must be exchanged for that of another for settlement of a transaction. Institutions and corporations in the international market place oftentimes need a certain currency to complete a deal, or to guard themselves from the effects of currency swings and rate changes. This system involving the exchange of different currencies has created the Foreign Exchange market, or FOREX, or FX. and more correctly known as the Global Interbank Currency Exchange Market.

Like stocks, gold and real estate investments, Foreign Exchange has become a very important tool for the investment community.
? To buy foreign goods or services, or to invest in other ...

Solution Summary

The solution discusses the purposes of the foreign exhange market. In addition the solution discusses how the Foreign Exchange Market is used to raise capital by international businesses.