An important part of this market comes from the financial activities of companies seeking foreign exchange to pay for goods or services. Commercial companies often trade fairly small amounts compared to those of banks or speculators,and their trades often have little short term impact on market rates.Nevertheless,trade flows are an important factor in the long-term direction of a currency's exchange rate. Some multinational companies can have an unpredictable impact when very large positions are covered due to exposures that are not widely known by other market participants.

Central banks:

National central banks play an important role in the foreign exchange markets.They try to control the money supply, inflation, and/or interest rates and often have official or unofficial target rates for their currencies.They can use their often substantial foreign exchange reserves to stabilize the market.Milton Friedman argued that the best stabilization strategy would be for central banks to buy when the exchange rate is too low, and to sell when the rate is too high—that is, to trade for a profit based on their more precise information. Nevertheless,the effectiveness of central bank "stabilizing speculation"is doubtful because central banks do not go bankrupt if they make large losses,like other traders would, and there is no convincing evidence that they do make a profit trading. The mere expectation or rumor of central bank intervention might be enough to stabilize a currency, but aggressive intervention might be used several times each year in countries with a dirty float currency regime. Central banks do not always achieve their objectives. The combined resources of the market can easily overwhelm any central bank.Several scenarios of this nature were seen in the 1992–93 ERM collapse, and in more recent times in Southeast Asia.

Hedge funds as speculators:

About 70% to 90% of the foreign exchange transactions are speculative. In other words,the person or institution that bought or sold the currency has no plan to actually take delivery of the currency in the end;rather,they were solely speculating on the movement of that particular currency. Hedge funds have gained a reputation for aggressive currency speculation since 1996.They control billions of dollars of equity and may borrow billions more, and thus may overwhelm intervention by central banks to support almost any currency,if the economic fundamentals are in the hedge funds' favor.

Investment management firms :

Investment management firms (who typically manage large accounts on behalf of customers such as pension funds and endowments) use the foreign exchange market to facilitate transactions in foreign securities. For example, an investment manager bearing an international equity portfolio needs to purchase and sell several pairs of foreign currencies to pay for foreign securities purchases. Some investment management firms also have more speculative specialist currency overlay operations,which manage clients' currency exposures with the aim of generating profits as well as limiting risk. Whilst the number of this type of specialist firms is quite small,many have a large value of assets under management (AUM),and hence can generate large trades.