What market is primarily involved in the trading of foreign currencies?

The primary market involved in the trading of foreign currencies is the Foreign Exchange Market. This market, often referred to as Forex or FX, is where currency pairs are bought and sold. It operates globally and continuously, allowing participants such as banks, financial institutions, corporations, and individual traders to exchange currencies at fluctuating exchange rates. The Foreign Exchange Market is crucial for international trade and investment, as it enables transactions between countries involving the conversion of one currency into another.

In contrast, the Equity Market focuses on the buying and selling of stocks or shares in companies, the Commodity Market deals with raw materials or goods such as oil, gold, or agricultural products, and the Derivatives Market involves financial contracts whose value is derived from the performance of underlying assets. Each of these markets serves distinct purposes in the financial system and operates independently of currency trading.