The need for Forex

Many companies make forex transactions with their banks. The need for forex arises from international trade and international investment.

· A company selling goods from another country might be required to pay in a foreign currency, such as the domestic currency of the supplier. It must therefore obtain the foreign currency to make the payment.

· A company investing abroad might need to obtain foreign currency to acquire or to make the investment.

Many foreign currencies can be bought and sold freely in the forex markets (FX markets), which are operated world-wide by banks.