Forex Traders (1)

According to Galati and Melvin, pension funds, insurance companies, mutual funds and institutional investors is a player who has a big role in the financial markets in general and in particular the foreign exchange market since the decade of the 2000s.

Bank

Interbank money market (interbank market) to meet the needs of the majority of the velocity of money in the business and the needs of daily transactions speculators can reach a value of trillions of dollars. Some of the transactions carried out on behalf of their clients, but most are for the benefit of the owner of the bank or banks for the benefit of themselves.

Until recently, foreign exchange brokers are the culprits of currency circulation in large numbers, facilitating interbank trading and matching sellers and buyers to "reward" (fee) is small. But today many businesses are turning foreign exchange to a more efficient electronic systems such as EBS (now owned by ICAP), Reuters Dealing 3000 Matching (D2), the Chicago Mercantile Exchange, Bloomberg and Tradebook (R)

The Business World

One of the cast of the foreign exchange market is the need of the company's activities in making payments for goods or services denominated in foreign currencies. Currency foreign exchange needs of a company is often only a small value compared with the needs of the banks and speculators and foreign exchange trading does often only a very small impact on the value of the currency exchange market. Nevertheless foreign exchange trade flows of these companies over the long term is an important factor for the direction of the exchange rate of a currency. Transaction some multinational companies can bring unexpected consequences when they close a position (buy or sell position) once huge transaction which is not widely known by the market players.

The Central Bank

The central bank of a country holds a very important role in the foreign exchange market. The central bank is always trying to control the money supply, inflation, and interest rates or even sometimes they have a target both official and unofficial exchange rates currency country. Often the central bank uses its reserves to stabilize the market.

With market expectations or the issue of intervention by the central bank alone has been enough to stabilize the local currency, but aggressive intervention conducted several times each year in a country whose currency exchange rates fluctuate.

Various sources of funds in the foreign exchange market when combined can easily "play" the central bank (withdraw or sell a currency in very large once so that the central bank can no longer intervene) in which this scenario appears in 1992-1993 where the European exchange rate mechanism (European Exchange Rate Mechanism - ERM) crash and several times falling exchange rate of the currency in Southeast Asia.