Definition
Foreign exchange is the market and process for exchanging one currency for another at a rate expressed through a currency pair.
In market context
Forex trading occurs across banks, dealers, venues, and customers rather than through one universal centralized exchange. Returns depend on pair direction, position size, spread, financing, conversion, and execution, while macroeconomic announcements and policy actions can produce rapid moves. Retail off-exchange arrangements may make the dealer the customer’s counterparty, so regulation, pricing method, and withdrawal terms require careful review before funding.
Risk context
Forex leverage can turn a small exchange-rate move into a rapid loss of most or all committed margin.
Source
Use the primary source for fuller regulatory or market context.