In contrast, the retail market is where individual traders and investors participate in forex trading. Retail traders typically trade through forex brokers, who provide access to the market and execute trades on their behalf. Retail traders trade much smaller amounts than institutions in the interbank market, and their trades typically do not have a significant impact on exchange rates. As a result, the bid-ask spreads in the retail market are wider than in the interbank market.

One similarity between the two markets is that both use currency pairs to express exchange rates. In both markets, traders buy one currency while selling another. For example, a trader may buy the EUR/USD pair in the retail market, while a large institution may trade the same pair in the interbank market.

Another similarity is that both markets are affected by economic and political events that can impact exchange rates. News releases, such as economic indicators, speeches by central bankers, and geopolitical developments, can cause volatility in both markets.

In summary, the interbank market and the retail market are two different markets that operate in the forex industry. Understanding their differences and similarities is important for traders looking to participate in forex trading. The interbank market is a wholesale market for large financial institutions, while the retail market is a market for individual traders. Both markets are affected by economic and political events, but the bid-ask spreads in the interbank market are typically much tighter than in the retail market.