What is the “foreign exchange market”?

The foreign exchange market is a global marketplace that facilitates the trading of national currencies against one another. It operates 24 hours a day, allowing participants—including banks, financial institutions, corporations, and individual traders—to buy, sell, exchange, and speculate on the values of different currencies. This market is crucial for international trade and investment, as it determines the relative values of currencies and helps businesses and travelers convert one currency to another.

In contrast, the other options refer to different types of trading and exchange systems. A domestic trading platform for stocks focuses solely on equity markets within a specific country, which does not involve currency trading. An online marketplace for buying goods directly from manufacturers pertains to e-commerce and retail, lacking any focus on financial instruments or currencies. A regional investment exchange typically deals with local securities and investments rather than the broader scope of global currency trading. Each of these alternatives represents a distinct financial or commercial activity that is separate from the overarching functions of the foreign exchange market.