The foreign exchange market is the means by which payments are made across national boundaries. It is also a market in which one currency is traded for another. For example, Indian Rupee (INR) is traded for US Dollar (USD). Hence in this market we have price of one currency in terms of another, such as, 1 USD = 46 INR.
Foreign exchange is the means by which one currency is exchanged for another. It is an over the counter market. This means that there is no single market place or an organized exchange where traders meet and exchange currencies. In this market traders/ dealers sit in the offices (dealing rooms) of major commercial banks around the world and communicate with each other through Internet, Intranet, Telephones and other efficient electronic media.