To trade oil wisely, one must first understand the specific characteristics of the crude oil market.
The transfer of foreign money from one country to another in order to settle payments is one of the currency market's primary functions. It streamlines currency conversions and simplifies international transactions.
Credit is also available on the foreign exchange market for international trade. For example, an importer can use currency market credit to purchase goods from other countries and pay for them later.
Frequent fluctuations in exchange rates can be devastating to parties and businesses that rely on them remaining stable. As a result, currency markets enable such parties to hedge their foreign exchange risk. A forward contract is an agreement to buy or sell foreign currency on a future date at a predetermined price.