Consider the currency market for British pounds and U.S. dollars. An increase in the supply of British pounds results in an appreciation of the pound and a depreciation of the dollar.
The currency market (also known as the foreign exchange market) is a one-stop marketplace where different currencies can be bought and sold by various participants operating in diverse jurisdictions around the globe.
All currency trading is done in pairs. Unlike the stock market, where you can buy or sell a single stock, you have to buy one currency and sell another currency in the forex market. Next, nearly all currencies are priced out to the fourth decimal point. A pip or percentage in point is the smallest increment of trade.
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