16 Foreign exchange markets This chapter looks at the foreign exchange (forex or FX) markets from a number of angles. Firstly, there is a description of the different types of FX markets, from simple spot `immediate' delivery of one currency for another (immediate means within two days), to forwards which allow exchange of cur- rency at a future date. Then we examine the way in which FX prices are quoted, with a particular emphasis on understanding the tables in the Financial Times. It has not always been the case that the main currencies have been allowed to float against each other determined by market forces. In the past rates of exchange were usually set by governments in a variety of interventionist regimes. We look at some of these alternatives to floating. Another important angle is the impact of shifts in FX rates on people and businesses. Significant sums can be lost and firms can go out of business if they fail to manage the risk.