The foreign exchange market refers to a trading place composed of central banks, foreign exchange banks, foreign exchange brokers and customers all over the world to engage in foreign exchange transactions and regulate foreign exchange supply and demand.

The emergence of foreign exchange market is caused by the large-scale development of international trade, which leads to the need for exchange and hedging. Later, it was found that the fluctuation of exchange rate could bring huge profits, so the foreign exchange market gradually developed into a market mainly for speculation.