Foreign Currency Exchange
Foreign currency exchange is the practice of exchanging one foreign currency for another. In general consumer terms this will involve buying foreign currency to use on a holiday abroad - here you will exchange £ sterling for the currency of the country that you will be visiting. So, for example, if you are visiting the USA you would change £ sterling into US dollars.
You can exchange currency in this way in many different ways. You can, for example, buy foreign currency at:
- Banks, building societies, post offices and other financial institutions
- Travel agents
- Some department stores/regular shops
- Online via currency exchange specialists
- In foreign exchange kiosks
And, when you return from your holiday you can change any remaining foreign currency back if you need to.
In investment terms foreign currency exchange (also known as FOREX) is all about playing the investment market to hopefully benefits from rises and falls in currency exchange rates. Investments here are made by banks, financial institutions, investment managers and commercial organisations on a large scale every day. Some individual investors also use this market. The aim here is to buy a specific currency with a different currency to make the maximum money out the transaction.