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Chapter 7 —Foreign Exchange Market International Balance of Payment Most countries of the world have their own currencies: The United States has its dollar, The United Kingdom has its pound. Trade among countries involves the mutual exchange of different currencies. The trading of currency and bank deposits denominated in particular currencies takes place in the foreign exchange market. The volume of these transactions worldwide averages over $1 trillion daily. Transactions conducted in the foreign exchange market determine the rates at which currencies are exchanged, which in turn dete