1. Central banks
Central banks control the forex market. They do this by setting interest rates and printing money. When they print money, they create inflation, which makes their currency worth less. Inflation causes people to want to buy foreign currencies instead of domestic ones. This creates demand for foreign currency, which drives down its value.
2. Hedge funds
Hedge funds are private investment firms that invest in securities and commodities. They are privately owned and have no shareholders. A hedge fund may use leverage, borrowing money from commercial lenders to increase the amount of capital available for investing.
3. Commercial Banks
Commercial banks provide financial services to individuals, businesses, and governments. Most banks offer checking accounts, savings accounts, home equity loans, business loans, and credit cards.
Governments influence the forex market by controlling interest rates and regulating the banking system. Many governments manipulate their currency's exchange rate relative to others.
Speculators predict future trends in the forex market and make bets based on those predictions. They often speculate on short-term price movements.
Investors look for long-term profits. They tend to purchase shares of stock in companies whose products or services they believe will produce high returns over time.
Traders take positions in the forex market hoping to profit from changes in prices. They may sell stocks, bonds, futures contracts, options, or any combination of these instruments.