Home Transactions Introduction The Dollar exchange and that of other currencies on the open market is a very powerful economic tool. Frequently, the purchase and selling of U.S. Dollars versus other currencies has caused significant shifts in American buying power versus that of other industrialized countries. Further, U.S. Dollars tend to be haven for other countries' wealth when there is instability or fluctuations with the home currency. Despite the recent scares of the American recession beginning in 2008, and the fear that the Euro or the Chinese Yuan would take over as the dominating currency, the Dollar exchange continues to function and be relied on. Forex The foreign exchange market, nicknamed currency market or Forex, provides the forum and trading table for financial players to exchange and trade different country currencies. While the Forex carries dozens of different currencies, a handful of players provide the main muscle and waves in the trading arena. These include the U.S. Dollar, the British pound, the Japanese Yen, the European Euro, and lately the Chinese have been making waves as their economic machines begins to rumble in development. Trading on the Forex happens 24/7, around the clock. Given the time differences, while one side of the planet can be sleeping, the other side can be actively moving amounts and values back and forth given the previous day's activities and ramifications. The major world financial centers function as the bases and traffic cops of the Forex, coordinating with each other continuously and controlling the market flow. However, it is up to each country to control the behaviors of its people. For the benefit of the whole, many of the major players act on each other's information to control and stop criminal activity when found. Purpose The Dollar exchange and that of other currencies exist to help facilitate international trade. Much of the premise began during early trade routes when the currency values of different countries had to be managed somehow. Since traders would likely find themselves having to trade supplies in one port to make it to the next, currency exchange began to develop. With gold quickly becoming the basis for all business trade, business overseas functioned internationally for centuries. The Forex began to be established in the 1970s as countries started to entertain floating currency values. In modern times, the U.S. Dollar became the substitute for gold given the American GDP strength and currency value reliability up until the 1990s when the Euro began to appear. Regardless of who maintains the super currency, however, foreign exchange still needs to occur, so the Forex will continue to function in the future; the players will just change hands if needed. Many companies use foreign exchange to facilitate their company value, particularly when it comes to accounting. If a company can strategically place its expenses in a lesser value currency and its profits in a higher value currency, then it can in theory inflate the value of its accounting books. This sort of thing happened quite a bit with international and global operations as they based their operational accounting in overseas countries' currency. The premise works well until the home market begins to bottom. Many companies found their wonderful profits dried up quickly when the U.S. Dollar lost significant value in the beginning of the 2008 recession. The result strengthened companies in foreign countries while weakening the capital strength of American companies. The Players Speculation Privacy