Like the money market, the foreign exchange market is a market where financial paper with a relatively short maturity is traded. However, the financial paper traded in the foreign exchange market is not all denominated in the same currency. In the foreign exchange market, paper denominated in a given currency is always traded against paper denominated in a given currency is always traded against paper denominated in another currency. One justification for the existence of this market is that nations have decided to keep their sovereign right to have and control their own currency. There would not be a foreign exchange market.
Like the money market, the foreign exchange market considers the time when the transaction is closed to be one of the elements in the market. In describing the money market, we made this point by comparing currency and treasury bill. Currency provides immediate acquisitive power, whereas a treasury bill provides this purchasing power at some specified future date (assuming the bill is held to maturity and not sold in the secondary market). In the foreign exchange market into spot and forward markets. The spot market is for foreign exchange to be delivered within 2 business days; the forward market is for exchange to be delivered at some specified future date. However foreign exchange transactions for immediate delivery or for delivery up to 7 days later are traditionally considered to be spot transactions, although they carry a different rate depending on the specific deliver date. The date of delivery is technically called the value date
Like the money market, the foreign exchange market considers the time when the transaction is closed to be one of the elements in the market. In describing the money market, we made this point by comparing currency and treasury bill. Currency provides immediate acquisitive power, whereas a treasury bill provides this purchasing power at some specified future date (assuming the bill is held to maturity and not sold in the secondary market). In the foreign exchange market into spot and forward markets. The spot market is for foreign exchange to be delivered within 2 business days; the forward market is for exchange to be delivered at some specified future date. However foreign exchange transactions for immediate delivery or for delivery up to 7 days later are traditionally considered to be spot transactions, although they carry a different rate depending on the specific deliver date. The date of delivery is technically called the value date
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