Currency trading takes place in the foreign exchange market. Because they enable us to make local and international purchases of goods and services, currencies are crucial. To undertake overseas commerce and business, foreign currency must be exchanged.
If you reside in the United States & wish to purchase cheese from France, you must pay the French in euros, either directly or through the firm from which you purchase the cheese (EUR). This implies that the American importer would have to convert the comparable amount of USD into EUR.
The absence of a central marketplace for foreign exchange is one distinctive feature of this global market. Now of taking place on a single centralised exchange, currency trading is instead carried out electronically over the counter (OTC), which implies that all transactions take place over computer networks among dealers across the world.
In practically every time zone, currencies are traded in the main financial capitals of Frankfurt, Hong Kong, London, New York, Paris, Singapore, Sydney, Tokyo, and Zurich.