FX (Foreign Exchange)

Definition:

Foreign Exchange (FX) is the market worldwide, which trades currencies. It allows the transfer of the national currencies into a foreign one and enables international trade, investment, travel, and electronic payments. The FX market is not centralized and is a 24/7 market with a daily turnover of trillions of dollars -making it the biggest financial market in the globe.

Use Case:

Pricing global products, used by individuals, businesses, banks and platforms to convert currencies in real-time or transfer money across borders.

Key Insights:

• The FX rates are continually changing according to the market demand, interest rates, inflation and geopolitical considerations.
• Currency exchange has the ability to influence the overall price paid in international purchase.
• The FX APIs (such as Fixer.io or Open Exchange Rates) are frequently used by businesses to show correct, up-to-date prices in various currencies.

Example:

When a user purchases a product of USD currency in India, the cost will be converted into INR with the applied FX rate, and then the user makes the payment.