Foreign exchange (foreign exchange or FX) is the buying and selling of one forex for another. for instance, you can still swap the U.S. dollar  for the euro. foreign exchange transactions can take vicinity on the foreign exchange marketplace, also called the foreign exchange marketplace.The foreign exchange market is the biggest, maximum liquid market within the world, with trillions of bucks changing palms every day. there may be no centralized location, as a substitute the foreign exchange marketplace is an digital community of banks, agents, institutions, and character buyers (in general trading via brokers or banks).The market determines the cost, also referred to as an change fee, of the majority of currencies. forex can be as simple as changing one foreign money for every other at a neighborhood financial institution. it could additionally contain buying and selling foreign money at the foreign exchange market. for instance, a trader is making a bet a valuable financial institution will ease or tighten monetary coverage and that one foreign money will give a boost to versus the opposite.whilst trading currencies, they are indexed in pairs, along with USD/CAD, EUR/USD, or USD/JPY.