Chapter 1: FOREX Currency Trading 101 What Is the FOREX? If everyone in the world used the same currency, there would be no need for a foreign currency exchange marketor foreign exchange rates. However, our world consists of many national currencies and as individuals orcompanies from one country trade across borders, the need for foreign currency arises. For example, when a U.S.importer buys French wine, either the importer needs Euros to pay the French merchant or the French merchantmust accept US Dollars and then convert them to Euros. The (spot) FOREX, a global market where trades are transacted immediately at current market price, plays a keyrole in transferring financial payments across borders and moving funds and purchasing power from one currencyto another. This international market has played an extensive and direct role in national economies and has amajor impact that affects our lives and our prosperity. The movement of different currencies between countriesdetermines a very important price: the exchange rate. It is the exchange rate that allows the currencies to betraded for profit.