Forex markets are open for business 24 hours a day, for 5 days per week, but this does not include weekends. The market opens in Australasia/ Asia on the later part of a Sunday evening London time but early morning in the far east. The Forex markets then trade continuously until the close of business in New York, around 10.30pm London time, the following Friday*. During these 5 days the Forex market will turnover more than US$25 trillion according to data from the Bank for International Settlements, or BIS, triennial survey 2016.
*Note that closing and opening times may vary due to daylight saving regimes.
To put that figure into context - this means that each week the Forex markets turnover a sum, that is larger than the total GDP of the USA is in a year. US GDP is circa US$17.98 trillion per annum by the way.
During these five day periods millions of Forex trades need to be reconciled and settled and monies paid out and received. Forex market hours are aligned to banking hours across the globe. Banks have historically not opened for business at the weekend and neither do the markets.
The Forex market has distinct regional sessions which can be thought of as Asian, European and North American. The table below shows Forex market turnover in US$, in individual financial centres, as sampled by the BIS survey. The Asian session sees turnover split between Singapore, Hong Kong and Japan (Tokyo). The second biggest session is in the USA - most of the turnover takes place in New York, though there will be some transactions in the Midwest and on the West coast as well.
However it's the European session (which straddles the Asian close and US open) that is by far the most active and this itself is dominated by London, which is the global hub and home of Foreign Exchange trading. London's contribution to global Forex turnover is almost twice that of its nearest competitor, New York (USA) as we can see below.
The table above data is drawn from the BIS triennial survey 2016 : Figures are daily turnover in billions of US$
Whilst London does the lion's share of global Forex business each week. Sterling is not necessarily the most actively traded currency. We can see this in our second table below which shows the average daily turnover by currency, in billions of US$ equivalents.
Table is drawn from the BIS triennial survey 2016 : Figures are daily turnover in billions of US$
As we can clearly see the US dollar is the most active currency. Partly because of its role as the global reserve currency, but primarily because it is the counter-party to and a participant in the vast majority of Forex transactions. Even when business is conducted that does not involve the US dollar directly, for example in a Euro CHF (Swiss Franc) trade. The respective rates between the Swiss Franc and the US dollar and the Euro and the US dollar provide a reference or framework for the Euro CHF quote. To learn more about Forex prices please visit Forex Rates
In effect then in Forex all roads lead to the Dollar. The Euro, the Yen and the Pound Sterling are the next most actively traded currencies. The two classical commodity linked currencies, the Australian and Canadian Dollars are next in line. With the “safe haven” Swiss Franc in 7th place just ahead of the Chinese Yuan.
We can draw some interesting conclusions from the two tables, For example daily Forex turnover in Japan is of the order of US $400 billion, whilst the daily turnover in Yen is just over a trillion dollars. Which implies that $600 billion worth of Yen is traded outside of Japan on a daily basis I think that serves to show how globalised the Forex markets really are.
Here to help
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