Commercial BanksThese institutions support the major flow of exchange transactions. All other market makers have their accounts opened at the banks: in other words, all exchanging, depositing and crediting transactions made by market makers go through bank wire. Banks accumulate (through client operations) the total market demand for currency exchange and all monetary replacements, creating a kind of "offer" to other banks. Usually, the banks do not limit their activity to the execution of client orders only: quite often they make independent transactions, using their personal funds for these purposes. So, objectively the currency market is represented by a market of agreements between many banks. The further mentioning of directions for currency and other rates should be related to the foreign exchange market.
The biggest influence upon world currency markets is made by international banks with daily turnover transaction size over 1 billion dollars. Among the banks of such kind, you may find Deutsche Bank, Barclays Bank, Union Bank of Switzerland, Citibank, Chase Manhattan Bank, Standard Chartered Bank, etc. The size of contracts supported by these banks may be great enough to cause changes in quotes or currency prices.
Traditionally, big market players are separated from bulls and bears. Bulls play for increasing currency price on the market; bears play for lowering the rate. Most often the market keeps balancing between bulls and bears which means that currency quotes differ within a very small range. However, when either bulls or bears take the floor, currency quotes start changing very quickly and enormously.
Companies Performing Foreign TransactionsCompanies, which take part in international trading, create stable demand for foreign currency (importers) and stable proposition of foreign currency (exporters). Moreover, they contribute to converting free foreign assets into short-term deposits. Most of these companies do not have direct access to the currency market, as they make exchanging and depositing operations via commercial banks.
There are many companies that make depositing of foreign assets: investment funds, money market funds, international corporations. These companies are engaged in customized managing of various assets' portfolios by purchasing securities of different governments and corporations. Dealing slang calls these companies simply "funds". The most famous funds are the "Quantum" Fund (George Soros) and the "Dean Witter" Fund.
Great international corporations that make foreign production investments (creation of branches, joint companies, representative structures, etc.) belong to this group of market makers as well. The list of these corporations goes on with Xerox, Nestle, General Motors, British Petroleum, and others.
Central BanksCentral banks are involved in currency regulation on the foreign market: protecting national currencies from swift "jumps", supporting export/import balance, etc. Central banks may influence the exchange market either directly (through currency intervention) or indirectly (by regulating monetary volumes and rates).
It is very difficult to qualify central banks as pure bull or bear market players. They may be both bears and bulls, depending upon current aims set for them. The central bank may work on the market individually - for creating a proper influence on the national currency. A central bank may also work in cooperation with other central banks for providing united currency policies on the market or united interventions.
These central banks have a major impact on world currency markets: central bank of the USA - US Federal Reserve (FED), the central bank of Germany - Deutsche Bundesbank, and the central bank of the UK - Bank of England (also known as "Old Lady").