foreign exchange


Definition of foreign exchange 

1 : a process of settling accounts or debts between persons residing in different countries

2 : foreign currency or current short-term credit instruments payable in such currency

Examples of foreign exchange in a Sentence

Our country has to export more in order to earn more foreign exchange.

Recent Examples on the Web

That news collided with a Bloomberg report that Chinese authorities, which have already shut down local crypto exchanges, were also planning to block its residents from trading bitcoin on foreign exchanges. Adam Shell, USA TODAY, "Bitcoin breaks under weight of regulatory scrutiny," 16 Jan. 2018 In foreign exchange markets, the U.S. dollar was little moved, with the ICE U.S. Dollar Index up 0.1%. Mike Bird, WSJ, "Trade Tit-for-Tat Takes Another Chunk Out of Asian Stocks," 25 June 2018 While the restriction remains, palm-oil shipments increased last year as importers gained more access to foreign exchange following a new trading window introduced by the central bank for investors., "Okomu Nigeria Sees Subdued 2018 for Palm Oil on Market Woes," 14 Feb. 2018 Still, Chinese banks purchased a net $19 billion of foreign exchange in May, compared with sales of more than $100 billion in late 2015—a sign that investors remain relatively happy to hold yuan. Nathaniel Taplin, WSJ, "Has the Big Yuan Short Finally Arrived?," 26 June 2018 Ethiopia suffers from massive debt and faces an acute foreign exchange crisis after exports fell short of targets. Elias Meseret, Fox News, "Momentous days in Ethiopia as new PM pledges major reforms," 9 June 2018 Under the sanctions, China has cut exports to the North of refined energy products and stopped importing seafood, coal and also North Korean laborers, all important sources of foreign exchange for the Kim regime. Jane Perlez, New York Times, "On U.S.-North Korea Talks, China May Hold the Cards," 11 May 2018 China alone has amassed over $3 trillion in foreign exchange -- primarily as a result of its cheap exports to the U.S. Katherine Greifeld,, "As trade war heats up, biggest currency whales make their move," 26 Mar. 2018 To Peron — a French national who spent much of 1968 as a foreign exchange student in Schenectady, N.Y., before relocating to Hamburg — German youth at the time were desperate to remake their own culture. James Sullivan,, "For krautrock icons Faust, the revolution goes on," 11 July 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'foreign exchange.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of foreign exchange

1691, in the meaning defined at sense 1

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Statistics for foreign exchange

Last Updated

29 Sep 2018

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Time Traveler for foreign exchange

The first known use of foreign exchange was in 1691

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More Definitions for foreign exchange

foreign exchange


Financial Definition of foreign exchange

What It Is

Foreign Exchange (FOREX) refers to the foreign exchange market. It is the over-the-counter market in which the foreign currencies of the world are traded. It is considered the largest and most liquid market in the world.

How It Works

Foreign Exchange has no centralized market. Instead, a foreign exchange market exists wherever the trade of two foreign currencies are taking place. It is open 24 hours a day, five days a week. This foreign exchange market exists to ease investment and trade. The primary trading centers are London, Paris, New York, Tokyo, Zurich, Frankfurt, Sydney, and Singapore. All levels of traders, from central banks to speculators, trade currencies with one another.

Why It Matters

Without this mechanism in place, foreign trade and investment would be impeded. Since many currencies abound along with a few major players like the U.S. dollar, the British pound, and the euro, this apparatus provides a clearinghouse to trade those major currencies.

Source: Investing Answers

foreign exchange


English Language Learners Definition of foreign exchange

: the process by which people in different countries pay each other by exchanging different types of money

: money from foreign countries

More from Merriam-Webster on foreign exchange

See words that rhyme with foreign exchange Encyclopedia article about foreign exchange

Comments on foreign exchange

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a state of commotion or excitement

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