Foreign exchange market is the market in which currencies are bought and sold against each other. It is the largest market in the world. In other words, the foreign exchange market is the market where currencies of different countries are traded. Because different countries in the world buy goods and services from one another, the different currencies change hands between countries. The currencies which are traded in bulk are US Dollar, Euro, Yen, Pound Sterling, Swiss Franc, Canadian Dollar, Australian Dollar. Prior to Euro, Deutschemark had an important position.