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Forex Market Overview
Introduction
The following facts and figures relate to the foreign exchange market. Much of the information is drawn from the 2010 Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity conducted by the Bank for International Settlements (BIS) in April 2010. 53 central banks and monetary authorities participated in the survey, collecting information from 1,309 market participants.
Excerpt from the BIS:
"The 2010 triennial survey shows another significant increase in global foreign exchange market activity since the last survey in 2007, following the unprecedented rise in activity between 2004 and 2007. Global foreign exchange market turnover was 20% higher in April 2010 than in April 2007. This increase brought average daily turnover to $4.0 trillion (from $3.3 trillion) at current exchange rates...The higher global foreign exchange market turnover in 2010 is largely due to the increased trading activity of “other financial institutions†– a category that includes nonreporting banks, hedge funds, pension funds, mutual funds, insurance companies and central banks, among others. Turnover by this category grew by 42%, increasing to $1.9 trillion in April 2010 from $1.3 trillion in April 2007." - BIS
Structure
* Decentralised 'interbank' market * Main participants: Central Banks, commercial and investment banks, hedge funds, corporations & private speculators * The free-floating currency system arose from the collapse of the Bretton Woods agreement in 1971 * Online trading began in the mid to late 1990's
Source: BIS Triennial Survey 2010
Trading Hours * 24 hour market * Sunday 5pm EST through Friday 4pm EST. * Trading begins in the Asia-Pacific region followed by the Middle East, Europe, and America
Size
* One of the largest financial markets in the world * $4.0 trillion average daily turnover, equivalent to: * More than 12 times the average daily turnover
Introduction
The following facts and figures relate to the foreign exchange market. Much of the information is drawn from the 2010 Triennial Central Bank Survey of Foreign Exchange and Derivatives Market Activity conducted by the Bank for International Settlements (BIS) in April 2010. 53 central banks and monetary authorities participated in the survey, collecting information from 1,309 market participants.
Excerpt from the BIS:
"The 2010 triennial survey shows another significant increase in global foreign exchange market activity since the last survey in 2007, following the unprecedented rise in activity between 2004 and 2007. Global foreign exchange market turnover was 20% higher in April 2010 than in April 2007. This increase brought average daily turnover to $4.0 trillion (from $3.3 trillion) at current exchange rates...The higher global foreign exchange market turnover in 2010 is largely due to the increased trading activity of “other financial institutions†– a category that includes nonreporting banks, hedge funds, pension funds, mutual funds, insurance companies and central banks, among others. Turnover by this category grew by 42%, increasing to $1.9 trillion in April 2010 from $1.3 trillion in April 2007." - BIS
Structure
* Decentralised 'interbank' market * Main participants: Central Banks, commercial and investment banks, hedge funds, corporations & private speculators * The free-floating currency system arose from the collapse of the Bretton Woods agreement in 1971 * Online trading began in the mid to late 1990's
Source: BIS Triennial Survey 2010
Trading Hours * 24 hour market * Sunday 5pm EST through Friday 4pm EST. * Trading begins in the Asia-Pacific region followed by the Middle East, Europe, and America
Size
* One of the largest financial markets in the world * $4.0 trillion average daily turnover, equivalent to: * More than 12 times the average daily turnover