Foreign exchange, or FX, is the market for trading one currency against another. FX prices are quoted in pairs, such as AUD/USD, EUR/USD or GBP/USD.
FX trading involves exchanging one currency for another. A currency pair shows the value of one currency relative to another, so the price can move as expectations change for interest rates, growth, inflation and risk sentiment.
The FX market is global and decentralised, with trading activity taking place across major financial centres. It is used by banks, businesses, investors and traders to manage or take exposure to currency movements.
Central bank decisions, inflation data, employment figures, commodity prices, trade balances, geopolitical events and market risk appetite can all affect currencies.
Clients often watch major pairs such as AUD/USD, EUR/USD, GBP/USD, USD/JPY and USD/CAD, along with crosses linked to the Australian dollar.
FX can be volatile and leveraged products can amplify both gains and losses. This page is general information only and does not provide financial advice.
For broader foreign exchange market background and turnover data, see the Bank for International Settlements Triennial Central Bank Survey.
BIS: Foreign exchange and OTC derivatives markets