Forex liquidity providers big players in Forex market, what they do is to provide the necessary funding to perform operations such as equity or debt transactions, this means they give liquidity to a certain asset, in the case of the Forex market, that asset is a currency.
When a currency pair is liquid, it can be purchased or sell and it will not affect the price.
Forex liquidity providers can give liquidity for a currency pair by placing orders and purchasing currency pairs which is known as active quotes, then they may need to pause the submission of active quotes to see how the market is reacting and then adjust the quote parameters according to the market specific necessities.
A liquidity provider makes quotes during at least the 90% of a trading day and the pauses should take less than 10 minutes.
On the other hand, liquidity providers also provide quotes by requests, and they should get the maximum spread between the bid and ask price.
The role of the Forex liquidity providers is to ensure some liquidity in the market when it is needed, and they may consider the market situation of supply and demand at the time of making a quote, if the market is volatile in a short time period they can decide not to quote or respond to a quote until conditions get more stable. Also they can start their job from five to ten minutes when the markets open to be able to have a better vision of the situation and they can stop before the closing of the market since conditions can change fast in any minute.
When a company is assisted by Forex liquidity providers, the company can offer better prices for investors and more opportunities to make some profit by the spread generated.