Forex is a loose acronym for Foreign Exchange Market that originated in the 1970s around the time free currency exchange rates were introduced in the world. In Forex markets, market participants determine the price of one currency against the other purely from market forces stemming from supply and demand. There are no external controls in a Forex market and is perhaps the best example of a perfect market with free competition. Forex is also the biggest liquid financial market in the world, with market volumes ranging in 1-3 trillion US Dollars a day.
The US Dollar, Euro, Japanese Yen, British Pound and Swiss Francs are the major currencies traded in Forex markets.