In today's marketplace, the dollar relentlessly fluctuates against the other currencies of the world. A number of factors, such as the decline of worldwide equity markets and declining world interest rates, have forced investors to engage in fresh opportunities.

The global escalation in trade and overseas investments has led to scores of national economies becoming consistent with one another. This interconnection, and the consequential fluctuations in exchange rates, has shaped a mammoth intercontinental market: FOREX.(Off Exchange Retail Foreign Currency Market)

For countless investors, this has fashioned exciting opportunities and the latest profit potentials. The Forex market offers unparalleled potential for rewarding trading in any market condition or any stage of the business cycle.^[1]

Foreign exchange trading increased by 38% between April 2005 and April 2006 and has more than doubled since 2001.^[2] This is largely due to the growing importance of foreign exchange as an asset class and an increase in fund management assets, particularly of hedge funds and pension funds. The diverse selection of execution venues such as internet trading platforms has also made it easier for retail traders to trade in the foreign exchange market.
 
In 2003, the legendary Warren Buffet, arguably The World's Greatest Investor, announced that he was selling dollars and buying a basket of other currencies. According to Buffett, "During 2002 we entered the foreign currency market for the first time in my life ... In 2003, we enlarged our position, as I became increasingly bearish on the dollar." He noted that at year-end, Berkshire held approximately $12 billion in foreign exchange contracts, within five (unspecified) currencies. Note, not stocks of companies denominated in other currencies, but the currencies themselves.

Warren Buffet invests in currencies. Makes one think, doesn't it?

Globally, some of the world's top banks are investing in the Forex Market as well. These include well known names like Deutsche Bank, UBS, Citigroup, Barclays and Goldman Sachs.

FOREX Market Snapshot

The following facts and figures relate to the foreign exchange market. Much of the information is drawn from the preliminary results of the 2007 Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity conducted by the Bank for International Settlements (BIS) in April 2007 and released on September 25, 2007. 54 central banks and monetary authorities participated in the survey, collecting information from approximately 1280 market participants.

"The 2007 survey shows an unprecedented rise in activity in traditional foreign exchange markets compared to 2004. Average daily turnover rose to $3.2 trillion in April 2007, an increase of 71% at current exchange rates and 65% at constant exchange rates.

Against the background of low levels of financial market volatility and risk aversion, market participants point to a significant expansion in the activity of investor groups including hedge funds, which was partly facilitated by substantial growth in the use of prime brokerage, and retail investors. A marked increase in the levels of technical trading – most notably algorithmic trading – is also likely to have boosted turnover in the spot market."

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