* Flow traders: Sometimes called execution traders, these are the market-makers, showing two-way prices at which to buy and sell, for the bank’s customers. If the customer makes a trade, the execution trader then has to cover the resulting deal in the interbank market, hopefully at a profit.

The U.S. dollar index is a futures contract listed on the New York Board of Trade (NYBOT) and Dublin-based Financial Instruments Exchange (FINEX) futures exchanges. The dollar index is an average of the value of the U.S. dollar against a basket of six other major currencies, but it’s heavily weighted toward European currencies.

The U.S. dollar is the central currency against which other currencies are traded. In its most recent triennial survey of the global foreign exchange market in 2004, the Bank for International Settlements (BIS) found that the U.S. dollar was on one side of 88 percent of all reported forex market transactions.

About midway through the Asian trading day, European financial centers begin to open up and the market gets into its full swing. European financial centers and London account for over 50 percent of total daily global trading volume, with London alone accounting for about one-third of total daily global volume, according to the 2004 BIS survey.

To make matters easier, forex markets refer to trading currencies by pairs, with names that combine the two different currencies being traded against each other, or exchanged for one another.

Speculators (specs for short) are what really make a market efficient. They add liquidity to the market by bringing their views and, most important, their capital into the market. That liquidity is what smoothes out price movements, keeps trading spreads narrow, and allows a market to expand.

Because of the overlap between North American and European trading sessions, the trading volumes are much more significant. Some of the biggest and most meaningful directional price movements take place during this crossover period. On its own, however, the North American trading session accounts for roughly the same share of global trading volume

The second currency in the pair is called the counter currency, or the secondary currency .

On most Sunday opens, prices generally pick up where they left off on Friday afternoon.