Forex (FX)
The market for trading one currency against another.
Exchange rates, such as the euro against the dollar, shift with interest rates, growth, and risk appetite, affecting trade and travel.
Forex is the market for trading one currency against another, quoted in pairs like EUR/USD or USD/JPY. The price is how much of the second currency it takes to buy one unit of the first. It is the largest and most liquid market in the world and it trades around the clock through the week as sessions hand off across time zones.
What moves a pair is the relative story of the two economies behind it, above all the gap in their interest rates and growth. Money tends to flow toward the currency offering a higher yield and a stronger outlook. Because most retail forex is traded with leverage, small percentage moves translate into large gains or losses, which is exactly why measuring risk in pips and sizing positions carefully is not optional.