When Do Firms Use The Foreign Exchange Market?
International companies use the foreign exchange market when
the payments they receive for exports, the income they receive from foreign investments, or the income they receive from licensing agreements with foreign firms are in foreign currencies
they must pay a foreign company for its products or services in its country’s currency
they have spare cash that they wish to invest for short terms in money markets (currency speculation - the short-term movement of funds from one currency to another to make profit from shifts in exchange rates)