The world currency exchange is centered in London and trades are executed via Forex, an electronic trading system. What stocks are to Wall Street is what currencies are to London. Although there is no meeting place, you can consider London the center for the world's currency exchange.
There are five dominant currencies in the world--the euro, U.S. dollar, British pound, Swiss franc, and the Japanese yen. Each one reacts differently to events that are repeated, such as war and global recession. During certain times, there is a reliable flow of money from one country's currency to another's. For example, during times of war or extreme uncertainty, there is an abnormal flow of capital into the Swiss franc. This is because of the long Swiss history of balancing on the fence.Outside of any involvement in war, the U.S. dollar is considered safer than gold. During times of prosperity, there is a flight to U.S. investments that causes the dollar to rise. The rest of the world loves a strong dollar because that means Americans, with their big pocketbooks, will buy more of the world's products.The euro has become the currency of Europe and is trying to lure some attraction away from the dollar. The failure of the euro to succeed at this is not surprising. There are too many countries, with drastically different politics, that will probably never equal the dollar's solid footing.
