Forex is a portmanteau of foreign currency and exchange. foreign exchange is the process of changing one currency into another another for a variety of reasons, usually for commerce, trading of tourism. The foreign exchange is also known as Forex or FX. Because of worldwide reach of trade, finance, commerce, forex markets tend to be the largest and the most liquid asset markets in the world. Currencies trade against each other as exchange rate pairs. for example, EUR/USD is a currency pair for trading the euro against the U.S dollar.