Joseph Kevin Martinez#9

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How do commercial banks operate in forex trading?

Commercial banks are the backbone of forex, handling interbank transactions, corporate hedging, and speculative flows. Major banks like JPMorgan, Citi, or Deutsche Bank act as market makers, quoting buy and sell prices for clients. They profit from spreads, fees, and proprietary trading. Benefits: banks provide liquidity, keeping spreads tight. Risks: conflicts of interest or benchmark manipulation, as past scandals showed. Retail traders interact indirectly with banks via brokers. Understanding bank behavior is vital—large flows from corporates or funds often set intraday direction. Banks are not just intermediaries but powerful influencers of forex pricing and liquidity.