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Forex MarketsAnalysis: Uncovering the Key Facts and Figures of the World’s Largest Financial Market

Last Updated on 10 February, 2024 by Rejaul Karim

Introduction:

The foreign exchange market (or “Forex”) is the largest and most liquid of all the global financial markets. Every day, an average of $5.1 trillion is traded on this market, with US dollar transactions accounting for 87% of all trades. In this article, we’ll explore the key facts and figures about the Forex market, such as its size, key currencies, trading times, and more.

What Is the Forex Market?

The foreign exchange market, or Forex, is the world’s largest financial market. It’s a decentralized, over-the-counter market where currencies are traded. The Forex market is open 24 hours a day, five days a week, making it one of the most accessible markets for traders.

The US dollar is the most traded currency in the Forex market, followed by the euro, Japanese yen, British pound, and Australian dollar. Currency pairs are quoted based on the exchange rate between two currencies, and the spread between the bid and ask prices of the most actively traded currency pairs is typically less than 0.5%.

Size of the Forex Market:

An average of $5.1 trillion is traded in the foreign exchange market daily, making it the largest and most liquid of the global financial markets. According to a 2019 survey by the Bank of International Settlements, the total value of spot transactions in the foreign exchange market was estimated to be $1.7 trillion, while the total value of forward and swap transactions in the foreign exchange market was estimated to be $2.4 trillion.

The US dollar is the most traded currency in the Forex market, accounting for 87% of the total market turnover. The most traded currency pair in the world is the EUR/USD, accounting for 28% of all currency transactions.

Trading Times:

The majority of currency trading takes place between the hours of 4:00am and 5:00pm GMT. The most active trading day in the foreign exchange market is Thursday, with a daily turnover of $1.6 trillion. The most active trading hour in the foreign exchange market is from 12:00pm to 1:00pm GMT with a daily turnover of $450 billion.

Market Participants:

The majority of currency trading takes place between the major banks and financial institutions. Other market participants include hedge funds, retail traders, central banks, and multinational corporations.

Conclusion:

The foreign exchange market is the largest and most liquid of all the global financial markets. An average of $5.1 trillion is traded in the foreign exchange market every day, with US dollar transactions accounting for 87% of all trades. The most traded currency pair in the world is the EUR/USD, accounting for 28% of all currency transactions. The majority of currency trading takes place between the hours of 4:00am and 5:00pm GMT, with the most active trading day being Thursday. The majority of currency trading takes place between the major banks and financial institutions.

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