2. Foreign exchange traders can be separated into two groups, Institutional hedgers, private or corporate investors.
3. Hedgers: Governments, companies (exporters and importers) and some investors have foreign exchange exposure which has to be off-set. Movements between their domestic currency and the foreign trading currency affects profits
4. Business Hedging with forex for the exchange of goods and services or investing in currencies, commodities will affect the bottom line. This is the core of all foreign exchange trading; however it only makes up approximately 5% of the actual market.
5. Speculators: This group includes banks, funds, corporations and individuals Creates artificial rate exposure in order to profit from the variations or movements in the price.