Introduction to Forex Markets

Introduction to Forex

Welcome to the Foreign Exchange course!

Most days, trillions of dollars worth of currencies move across borders — exchanged by travelers, businesses, and governments.

This invisible flow of money is called the Forex market, and it powers the global economy.

In this course, you’ll learn what Forex is, and what drives the world’s largest financial market.

Along the way, we’ll meet Anika, who discovers how currencies shift when she travels to Japan and begins exploring Forex trading herself.

What is Forex?

Forex or FX, short for foreign exchange, is the global marketplace where currencies are bought and sold.

It’s the largest financial market on Earth, trading as much as $10 trillion daily as of fall 2025. 

The Forex market runs 24 hours a day, 5 days a week — following the sun from Sydney to Tokyo, London, and New York.

Unlike stock exchanges, there's no central marketplace. It works over-the-counter through a network of banks, institutions, and individual traders who trade currencies electronically.

Anika Plans a Trip to Japan

Meet Anika, a 28-year-old cybersecurity expert from Birmingham, UK, saving for her first trip to Japan.

Before her holiday, she exchanges £3,000 for ¥610,000 and learns she’s lucky — last year, she would’ve received fewer yen.

The pound has strengthened against the yen. Curious, Anika asks, “Why did the rate change? Who decides what a pound or yen is worth?”

Her question is the perfect entry point to understanding how the Forex market sets exchange rates every second.

A Market Without Borders

Just like Anika, most people participate in the Forex market without even realizing it. You engage with it whenever you:

Exchange money for another currency while traveling
Buy an online product priced in a foreign currency
Send remittances abroad
Work for a company that deals with international payments

This constant flow of money across borders — from individuals, businesses, and governments, keeps the global foreign exchange market active and highly liquid, which is vital to global trade.

Introducing Major Currencies

US Dollar (USD): The global reserve currency
Euro (EUR): Shared by 20 of the 27 EU member countries
Japanese Yen (JPY): A safe haven in volatile times
British Pound (GBP): One of the oldest currencies still in use
Australian Dollar (AUD): Influenced by global commodity prices

Other actively traded currencies include the Swiss franc (CHF), Canadian dollar (CAD), and Chinese renminbi (CNY). 

Quick fact: The US dollar dominates the market and is involved in nearly 90% of all FX transactions!

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