What is the buying and selling of foreign currencies?

The buying and selling of foreign currencies, known as foreign exchange (forex) trading, involves exchanging one currency for another at an agreed-upon price. This process occurs in a decentralized market where participants, including banks, financial institutions, corporations, and individual traders, engage in currency pairs. The primary purpose of forex trading is to facilitate international trade and investment, as well as to profit from fluctuations in currency values. Exchange rates are influenced by various factors, including economic indicators, geopolitical events, and market sentiment.