Role and importance of different market participants in foreign exchange market
Answers
Foreign currency exchange trading is a fast growing business industry worldwide. The currency exchange takes place on a very large scale and this market has a global presence as currency exchange market participants are from all around the globe. There are various participating entities taking part in forex trading. The main players or the main market participants in currency exchange are Central Banks, largest investment firms, ultinational commercial companies, hedge funds, mutual funds, insurance companies and retail forex brokers etc. The different forex market participants have different levels of access in currency trading market. At the top, there is inter bank market which consists of largest investment banking firms. Within this inter-bank market, the spreads are razor sharp and these spreads are not known to other forex market participants who are not a part of this inner circle.