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The foreign exchange market is where currencies are traded.
Currencies are important to most people around the
world, whether they realize it or not, because currencies
need to be exchanged in order to conduct foreign
trade and business. If you are
living in the U.S. and want to buy cheese from France, either you or the
company that you buy the cheese from has to pay the French for the
cheese in euros (EUR). This means that the U.S. importer would have to
exchange the equivalent value of U.S. dollars (USD) into euros. The same
goes for traveling. A French tourist in Egypt can't pay in euros to see
the pyramids because it's not the locally accepted currency. As such,
the tourist has to exchange the euros for the local currency, in this
case the Egyptian pound, at the current exchange rate.
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