Australia’s Financial Market: Foreign Exchange Market

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How does the Foreign Exchange Market operate? The foreign exchange market, also known as forex, FX, or currency market is a global decentralized market for trading of currencies and operates on several levels, with the foreign Exchange market being the biggest financial market in the world, and the Australian foreign exchange market ranking seventh in the world. Australia has strong foreign trade links with Asia, United States, New Zealand, Western Europe and the Middle East countries. The foreign exchange market operates by assisting international trade and investment by enabling currency conversion, for example, by allowing a business in one country, to import goods from another country, using a different currency. The foreign exchange policy in Australia also helps in the advancement of profit and national interest of our country. The policies are directed in a way which would help benefit both investors and people of Australia. Trading Until recently, the Foreign exchange market had not been accessible for private investors and speculators. High requirements towards the minimum transaction and other restrictions had limited the foreign exchange market to large banks, hedge funds or major currency traders. These days, speculating in foreign currencies is within reach of small private investors. Trading currencies involves varying degrees of risk just like any other field of speculative trading. Traders buy and sell currencies with currencies being traded between various organisations and banks, enabling businesses to perform transactions outside their local currency. Here, transactions worth more than $4 trillion are being turned around globally each day, as measured by the Bank For International Settlements. With any act... ... middle of paper ... ...ents and allegedly creating a false or misleading appearance regarding trading prices in various shares. Each of the charges laid under section 1041B of the Corporations Act 2001 carries a maximum penalty of $495,000 or imprisonment for 10 years or both. The Australian Taxation Office generates rules and determinations for the foreign exchange policy in Australia. The new rules were applicable from July 1, 2003. These policies are determined on the amount of loss and profit made in a particular fiscal year. Works Cited

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