In general, the Forex market is comprised of four different groups. The most influential participants of the market are the major banks, bank associations (like HSBC, Citigroup, Barclays Capital, JP Morgan), and a few central banks, such as the European Central Bank, the Bank of England, and the Federal Reserve of the US. The whole bank community, dealing with currency exchange and credit operations, forms the inter-bank market. The aim of such market players as central banks is not getting a profit, but adjusting the currency rates, and thus, the economy of their countries. Very often, central banks make deals not directly, but through major commercial banks, concealing their activities. In fact, it becomes obvious that the banks of this group are not ‘’just’’ making deals, but also suggest their own prices. Active participants of the market, as usual, make deals up to millions and milliards of USD and trade with their own, not borrowed money. In Forex, such participants, offering their own prices and making deals of almost unlimited volume, are called market makers.
The second layer belongs to the investment, insurance, pension funds, medium-sized banks and large corporations. These market participants perform currency exchange operations for the investment purposes and for business deals, sometimes for long-term speculations. One of the largest investment funds in the world is ‘’Quantum’’ of George Soros. Funds can attract billions of dollars of borrowings and can withstand even the intervention of central banks in the foreign exchange market.
The third group of participants is the financial companies. In fact, they are the intermediates between the individuals and the market. These individuals, both physical and legal, form the fourth group of participants in the Forex market. In fact, financial companies have overcome the barrier of engagement into the Forex market for the individuals. In addition, Internet development made brokerage services available for everyone around the world.
