Money is the blood of the economy, is the way of doing all the transactions. During the years, the control have moved from hand to hand, and some foreign currencies have been more important than others and have last many years.
Actually the strongest foreign currencies in the world are the dollar and the euro, today almost 67 % of all the reserves of central banks are in dollars. Gold is simply a little part and euros a 15%.
Until the creation of the dollar there was no theorical rival of the dollar, regarding to its function of reserve, the actual situation of foreign currencies is not the same as 50 years ago where dollar was the most important currency. Most of foreign currencies have been appreciated lately regarding the dollar.
Many economists agree that dollar devaluation and commercial deficit increase of the United States are the base where economy is supported, even if this situation is taking some problems, and some countries have had the idea of diversifying their reserves in dollars so that they don’t continue falling.
Today countries that are members of the OPEP (Crude Exporters Countries), think about the possibility of exchanging the foreign currency dollar as a way to obtain crude, per other stronger foreign currency. Who appears in scene to take the place of the dollar is the euro, that has been appreciated over the American currency. If this happen, it would be the end of United States’hegemony, even if this country has been based on two bases, one is a strong foreign currrency and the second one is its militar power as a way of having control over other nations.

The euro is the currency adopted by some countries in Europe since 2002. The symbol that represents the euro was developed by the European Commission and it is inspired in the letter epsilon of the Greek alphabet. They have chosen that symbol as a reference to the initial of Europe and the other two parallel lines mean the stability in the euro zone. The official international abbreviation for the euro is EUR and has been registered at the International Organization of Normalization (ISO).
In July 2002, the euro exceeded for the first time the exchange rate with the American dollar, since then it has been in a similar situation. In Dicember 2006, the euro took the place of the dollar as the most used currency for cash payments, during that month around 614.000 million of euros were circulating in the world, while dollars were about 588.000 millions in euros.
There are also some states that help the use of the euro, as they don’t agree with the politics of the United States in issues as economy or international diplomacy, and that in many cases, does not mean having a pro-european position, but an antiAmerican. Iraq for example, before being attacked by the United States, exchanged its dollars to euros. Some social sectors saw in this exchange one of the reasons why Bush intervened Iraq to recover dollar and avoid the Organization of Crude Exporters Countries change its currency to euro, as if that happened the consecuences could be very bad for the United States.

Although the dollar fall in 2006, the American currency is still the principal reserve currency of most of the countries of the world. The actual situation that is live in the Middle East and the increase of the crude and gold prices have provoked that the situation of the American economy has become weaker in these last years, even if the American power continues having its hegemony.
Expectations in 2006 regarding the dollar were that, even the fall that we noticed at the beginning of this year,the dollar would raise its value, although the situation continued this way until quoting lower than the euro.
During this year expectations were very difficult to foresee and there has been a fight between the federal Reserve and the European Central Bank in politics refered to interest rates. What was predicted with the dollar in 2006 happened a year later since the mortgage crisis in the United States. Many borrowers stopped paying and that provoked the bankrupt of many financiers and this took us to a general collapse. Automatically the titular of the Federal Reserve, Ben Bernake, had to go with the principal Central Banks of the world to inject liquidity at the market. This measure has not had the expected result and they took the decision of reducing the interest rate half point, leaving it in 4%. At the same time, the titular of the European Central Bank, Jean Claude Trichet, said that the interest rate would be fixed and would continue in a 4%.
The strength of the european currency and the critical situation of the dollar in 2006, continued its way during this year. The economy stability of the countries members of the european community make possible have interest rates fixed, while in the United States it is very difficul as the deficit of the commercial balance, as a consecuence of the excess of imports from China, make the fall of the dollar take part of an state politics and not just a fall as many predict.

There are some terms with which we get familiar and they become part of our vocabulary without knowing exactly the meaning. Many times we say foreign currency market without thinking what is a foreig currency market?.
The foreign currency market, is the place where foreign currency supply and demand meet. The price of each currency depends on the amount of transactions that are done daily.
What is the foreign currency market? Is the foreign currency market efficient?.So that the foreign currency market has a good performance it has to have certain characteristics.One of them is that it should have low transaction costs, in second term it should be transparent, that is fundamental for the market structure and in third place, free capital movement without the intervention of the authorities.
The agents that take part at the foreign currencies market are the banking foreign currencies agents and not banking, companies and people, speculators, Central Banks and the government.
As you can see, answer to the question of what is the foreign currency market is not easy as to the simple dictionary definition we should add some basic rules that are essential to understand the working of this market.

Much has been said these last days about the low expectations of growing in the United States, the subprime crisis, the high crude prices and the diversification plans of the reserves in countries of the Middle East and China. All these factors answer to the evolution of the foreign currencies regarding to the dollar.
Most of the countries of the world show today a major evolution of their foreign currencies regarding to the American currency. This situation brings uncertainty in the countries that have more quantity of reserves in dollars as they lose value every day.
The dollar devaluation and the appreciation of the euro make some people celebrate and others complain. Most of the operators agree with the situation as their investment improve every day, even if, the evolution of the euro, makes the German currency worry as it sees its disadvantage in front of the euro. Some days ago Angela Merkel, the German chancellor recognised that a strong euro is not a positive factor for a country and that this evolution of the foreign currency shows a problem.
This uncertainty trend is see also in what happens every day at the market. Generally when there are fears about the way that the economy will go in the world, as it happens today, the market takes some safety foreign currencies as the dollar. Althought this trend has changed, the evolution of the european foreign currency has made investors protect themselves with this currency.
The euro foreign currency evolution will break the barrier of 1,50 dollars, this the investors know it and they also believe that this is not a temporary trend, but a tren that is going to continue definitely.