How Much is Traded in the Forex Markets Annually?
It’s interesting to see that the Bank for International Settlements (BIS) have released the results of their latest triennial survey of the forex market.
Global turnover in April 2010 was US$4 trillion, that’s 20% higher than in April 2007. There’s also a 48% turnover increase in ’spot’ transactions which means that spot-trades now represent 37% of all Forex activity.
Note that ‘Spot’ transactions are those which settle within two working days. ‘Futures’ are those trades that settle on any other day. You can trade both Spot and Future markets through CFDs and Forex spread trading.
Not surprisingly, the US dollar is still the most heavily traded currency. The dollar takes one side of 85% of all FX transactions. In second place is the euro, accounting for 39% of all business, the Japanese yen comes third with 19% and the pound is fourth with 13%.
The BIS data clarifies the difference in the popularity of the various currency pairs and EUR/USD accounts for 28% of all forex turnover. Note that USD/JPY accounts for 14%, GBP/USD 9% and all the others currency pairs account for 6% or less.
More than one trillion dollars’ worth of EUR/USD is transacted every day, roughly ten times as much as changes hands in GBP/EUR trades. With numbers like that it is easy to see which pair enjoys the more liquid market, although you can trade any of these markets with IG Index.
At the same time, it is easy to see from the figures where the forex expertise-clusters around the world are situated. The United Kingdom handles 37% of turnover and more than double the 18% accounted for by the United States. No other country makes it into double figures. Interestingly, France and Germany put together transact less than Singapore.