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Roles Played By Participants In the Market |
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Market makers are those market participants that buy and sell currencies as market makers. Dealers/traders constantly quote a two-way price to another market maker, but not to corporations. They are primarily major banks such as Midland, J.P. Morgan, Chase, Morgan-Stanley, Deutsche Bank, Union Bank of Switzerland and Citibank.
Regional banks deal with market makers top meet their own foreign exchange needs and those of their clients.
Central banks handle foreign exchange transaction for their governments, certain state-owned entities, and for other central banks. They also pay or receive currencies not usually held in reserve and stabilize markets through intercession.
Corporations are generally price takers, meaning they seek to either buy or sell currencies, and enter into a foreign exchange transaction for a specific purpose such as converting trade or capital flows, or to hedge a currency position.
Brokers are intermediaries in the market who match deals between market makers by providing market makers with a bid/offer quote left with them by other market makers. They are bound by confidentiality not to reveal the name of one client to another until the deal has been completed.
Investors are typically managers of large investment funds and as such are a major force in moving exchange rates. They utilize the market for hedging, investment and/or speculation.
Regulatory authorities, including government and international bodies, while not participants in the market, often impact the market. National governments can and do impose controls on foreign exchange by legislation or market intervention through the central banks. Most of the market is self-regulated, with guidelines of conduct established by such groups as the Bank for International Settlements (BIS) and the International Monetary Fund (IMF).
Speculators seek excess earnings as a recompense for their activities in the market.
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| Symbol |
Rate |
| GBP:CHF |
2.007608 |
| GBP:JPY |
182.222212 |
| GBP:USD |
1.757198 |
| NZD:USD |
0.658397 |
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History
