Currency markets are traditionally the most unpredictable and potentially profitable markets on earth. The professionals who take part in this risky game are known as Forex traders. Forex is a shorter, catchier way to say foreign exchange. Traders who buy and sell in the Forex market are investing in or betting against world currencies.
As you may know, the markets have been incredibly erratic of late in the wake of the economic recession. There is also the Group of 20 meeting in South Korea next month. The buildup to this year's meeting of finance ministers and governors from twenty of the world's biggest economies has been one of the most contentious on record.
A dispute between the earth's two largest economies, the US and China, has the currency markets in a dither. The main bone of contention is the US Federal Reserve and their purported plans to release more currency into the markets. As its largest trading partner, China opposes this action because it will dilute and thusly devalue US currency. And if that happens, China will receive less in real dollars for their exports.
Forex traders all over the world are waiting with bated breath for the G-20 summit to see if the US confirms what the rest of the world suspects.
In the meantime, UK traders are concerned with the pound and how it is trading against the Euro. Though the Euro has been on a good run of late, it recently retreated from a 6-month high and fell to .8740 against the pound.
