Currencies in pairs
Forex (foreign exchange, or FX) is the market for exchanging one currency for another. Prices are quoted in pairs: EUR/USD at 1.10 means one euro costs 1.10 US dollars.
The first currency is the base, the second the quote. If EUR/USD rises, the euro has strengthened against the dollar.
How the market works
Forex is traded over the counter between banks, institutions and brokers rather than on one central exchange, and it trades around the clock on weekdays.
Interest rates, inflation, economic data and central-bank decisions are among the main things that move exchange rates.
Retail forex products
Many retail forex products are leveraged — for example CFDs — meaning a small move in the rate can produce a large gain or loss relative to the money put in. Regulators in several regions require brokers to publish how many retail accounts lose money on these products.