Forex: the Facts and the Figures

Even an experienced trader can be overwhelmed by the figures and numbers that relate to the forex currency market. Because the market is affected by various economic and political factors, forex facts and figures are constantly changing.

The forex ( foreign exchange) currency market is the biggest financial market in the entire world. The monetary transaction traded daily amounts to over $3.2 trillion. Of this figure, over $360 billion come from forward transactions, $1.7 trillion in FX swaps and $129 billion in gaps.

In addition, $1 trillion comes from transactions in spot trading. Of this figure, over $427 billion emanate from dealer transactions, $394 billion from financial and monetary institutions and $184 billion from non financial clients. Forex figures indicate that almost 30% use the EUR/USD currency pair in spot trading.

The abovementioned forex figures are 35 times larger than that of the NSYE or any other stock market. It is also four times larger than the world GDP.

Over 50% of forex transactions are conducted in the UK (34.1%) and the United States (16.6%). The rest of the market share is divided between Switzerland (6.1%), Japan (6.0%), Singapore (6.0%), Hong Kong (4.1%), Australia (4.2%), France (3.0%), Germany (2.5%) and Denmark (2.2%). The other locations make up the other 15.0%.

When it comes to the currencies, the forex facts and figures are as follows: the U.S. Dollar is the most widely traded. At over $2.3 trillion daily, that is more than 80% of the total volume. Next is the Euro at 37%, the Japanese yen (JPY, 20%), the British Pound (GBP, 16%) and the Swiss Franc (CHF, 6%).

Rounding out the top ten are the Australian Dollar (AUD 5 %), Canadian Dollar (CAD 4%), Swedish krona (SEK 2.3%), Hong Kong Dollar (HKD 1.9%) and the Norwegian krone (NOK 1.4%). The remaining 16% comprise the other currencies.

The most widely traded currency pairs are the EUR/USD (37%), USD/JPY (13%), GBP/USD (12%), AUD/USD (6%), USD/CHF (5%), USDCAD 4%), EUR/JPY (2%), EUR/CHF(2%) and the remaining 27% are made up of the other currency pairs. The most popular cross rates are the EUR/JPY, EUR/GBP, EUR/CHF, GBP/JPY and GBP/CHF.

The forex figures for market participants indicate that the largest currency traders are banks and financial institutions, including Deutsche Bank, USB AG, Citi, the Royal Bank of Scotland, Barclays Capital, BA (Bank of America), HSBC, JP Morgan and Morgan Stanley.

As vast as these forex facts and figures are, they will only get more massive, as the growth of online technology has made it possible for people from all walks of life to get into forex trading.