What is the purpose of the foreign exchange market, or any market for that matter? It seems like a simple question with a simple answer, to permit participants to sell and buy commodities, equities or futures and to exchange one currency for another. But such a simple statement covers a world of complexity. If two […]
The Market as Mass Mind
What is the purpose of the foreign exchange market, or any market for that matter? It seems like a simple question with a simple answer, to permit participants to sell and buy commodities, equities or futures and to exchange one currency for another. But such a simple statement covers a world of complexity. If two parties wish to conduct an exchange, of one currency for another or of an equity or bond for a sum of cash the first question that arises is at what rate or price should the transaction take place? In a retail environment the price is predetermined by the seller and is rarely changed.