The full name of foreign exchange market is the abbreviation of international exchange, which is the main component of financial market. Its original meaning refers to the market for buying and selling foreign currency business and invoices and receipts denominated in foreign currency. The foreign exchange market has two concepts:

1, static foreign exchange: broadly speaking, it refers to all external financial capital;

2. Dynamic foreign exchange: refers to the financial activities of resolving debt disputes by currency exchange between countries.

The role of foreign exchange market

1, its most basic function is the payment function for economic activities between countries;

2. It can realize the transfer of money purchasing power or funds between countries and has the function of exchange;

3. It can hedge and become a hedged futures transaction, so that foreign exchange income will not be lost to importers and exporters because of fluctuations in foreign exchange interest rates, which is very valuable to it;

4. You can speculate. In other words, in the forward foreign exchange market, speculators can take advantage of the fluctuation of the foreign exchange market to make profits and make bets on the future market.