The Foreign Exchange Markets, where people buy and sell foreign currency, also referred to as the "Forex" or "FX" market, is the largest financial market in the world, 30 times larger than the combined volume of all US equity markets.
Currencies are traded in pairs, for example Euro/US Dollar or US Dollar/Japanese Yen.
Foreign money held by a government to support its own currency. About 5% of daily turnover is from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign into their domestic currency. The other 95% is trading for profit, or speculation.