who runs forex market?

<p>The higher the demand, the higher would be the prices. The higher the supply, the lower would be the prices. The traders and foreign investors influences and derive the trend of instruments.</p>

<p>Forex markets are controlled by the supply and demand of the currencies between the two countries. It operates based on the demand and supply of the market.</p>

<p>Like most financial markets, forex is primarily driven by the forces of supply and demand. Central banks, Governments, Market sentiment, Credit ratings etc.</p>

<p id="isPasted">The forex market is controlled by the supply and demand of currencies between two countries. For example, let's say I want to pay for a pen from the US for $. I would have to convert the $1 into $ to pay the company. This increases the demand for $, which increases the $ ratio.&nbsp;</p><p>It happens with every commodity that is exported or imported.</p>

<p id="isPasted">To begin with, you must understand that exchange rates are driven by the forces of demand and supply. Demand for a currency (e.g. USD) rises when more people buy it/exchange their own currencies for USD, so the currency appreciates relative to other currencies, causing the exchange rate to rise. The exchange rate falls when more people sell the currency/exchange it for other currencies.</p><p>In many countries, exchange rates are not controlled centrally (by the government or the central bank). Individuals, businesses, exporters, and banks (mainly) conduct these transactions without central control. Depending on their means, time, and judgment (these institutions are not assigned by the government). A float exchange rate system is one such system.</p><p>Many countries, including the U.S. and France, have such a system. Exchange rates fluctuate more volatilely in this system. Through demand and supply, millions of people, businesses, and banks perform international transactions every second, affecting the exchange rate.</p><p>In some countries, the central bank intervenes in the market. The bank buys and sells its (and other countries') currencies. The purpose may vary. Sometimes it is to keep the exchange rate within a specific range so that the economy does not suffer from the exchange rate volatility. Sometimes they intentionally sell their currency to cause it to depreciate in value so that the country's goods look cheaper to foreigners, and they buy more (causing exports to rise). These countries operate on a fixed exchange rate system. China and Qatar are two of some that have adopted such as system. Thus, in such as system, the central bank 'manages' the exchange rate indirectly simply by buying and purchasing currencies.</p>