Foreign Exchange Market Statistics 2000-2013
The Forex Market is a decentralized OTC (Over-the-Counter) financial market. Forex is running 24 hours per day using the electronic network of banks (ECN). It is estimated that the Forex turnover today may exceed 4 trillion dollars per day. Forex volumes are generated mainly from speculators. It is estimated that 90% of the Forex trading volumes are generated by speculators (day traders).
Forex Market Structure
The global free-floating Forex currency system started in 1971 as the Bretton Woods agreement ended. The online Forex trading market started in the late 1990s. Forex is an open 24-hours market {Sunday 5 pm (EST) - Friday 4 pm (EST)}. Forex Trading starts in the Asia-Pacific and continues in the Middle East, Europe, and the US.
The Most Traded Currencies
The US Dollar is traditionally the most traded Forex currency in the world (85% of all Forex transactions). The Euro is the second most traded Forex currency (39% of all transactions and the Japanese Yen is the third most traded Forex currency (19% of all Forex Transactions). Each Forex transaction involves 2 pairs so the total of all transactions equals 200% and not 100% as in every other financial market.
Chart: Most Traded Forex Currencies
Here are the weights of the most traded Currency Pairs:
- EURUSD, 37% of the total volume
- USDJPY, 13% of the total volume
- GBPUSD, 12% of the total volume
- AUDUSD, 6% of the total volume
- USDCHF, 5% of the total volume
- USDCAD, 4% of the total volume
- EURJPY, 2% of the total volume
- EURCHF, 2% of the total volume
Major Cross Rates
Here are the most popular Forex Crosses: EURJPY | EURGBP | EURCHF | GBPJPY | GBPCHF
Forex Market Size (According to BIS)
The Forex market is the largest in the world with daily turnovers of 4 trillion USD on average. That makes Forex 12 times larger than global equity markets while the Forex annual turnover equals 10 times the global GDP.
Major Forex Markets
The New York and London markets are the largest and account for about 50% of the total Forex daily turnover. As concerns the Forex market overlap, about 65% of the New York volume activity occurs in the morning, when the New York Market overlaps with the European markets.
Table: Forex Market and Geographical Volume Activity Distribution
|
Forex Market |
Volume Activity (%) |
|
United Kingdom |
37.0% |
|
United States |
18.0% |
|
Japan |
6.0% |
|
Switzerland |
5.0% |
|
Singapore |
5.0% |
|
Honk Kong |
5.0% |
|
Australia |
4.0% |
|
All the Rest |
20.0% |
The Forex Volume Activity Concentration in Large Banks
Forex turnover is concentrated in large banks. 7 banks in the US account for about 75% of the country’s total currency turnover. The same is valid for Japan. In the U.K. 7 banks account for about 75% of the total currency turnover. The Swiss Forex activity is far more concentrated as 2 banks account for about 75% of the total currency trading activity in Switzerland. Furthermore as concerns the Global Forex Market, 10 institutions account for about 73% of the total activity. UBS and the Deutsche Bank are some of the largest players in the Forex Market.
Forex Historic Volatility -Analytical Results
Here is FxPros.net's research on the Historic Forex Volatility based on Forex majors.
Year 2000: Forex Statistics
■ Market Volatility: The Average Market Volatility was normal, with yearly average volatility at 1.04% Daily and 1.06% on Intraday.
■ Daily Volume: The average daily volume of 89.72 billion USD is normal. The average daily volume for all the 7 currencies, totals 628 billion per day.
■ Yearly Exchange Rate Change: The year 2000 was a good year for the Japanese Yen, while the US Dollar moved up against the Euro and especially against the AUD and the NZD.
Year 2001: Forex Statistics
■ Market Volatility: The Average Market Volatility for 2001 was 1.04% Intraday (-4.21% compared to the year 2000) and 1.01% Daily (-2.65% compared to the year 2000).
■ Daily Volume: The total average daily volume at 98.5 billion USD was up 9.77% compared to the year 2000. Increase in the volume activity of USD/JPY (+34.5%) and EURUSD (+38.9%)
■ Yearly Exchange Rate Change: Another good year for the Japanese Yen. The US Dollar is weak against the Euro and other currencies.
Year 2002: Forex Statistics
■ Market Volatility: The Average Market Volatility for 2002 was 0.89% Intraday (-12.3%) and 0.91% Daily (-10.7%).
■ Daily Volume: The average daily volume significantly increased in 2002 and averaged about 108.77 billion USD, daily.
■ Yearly Exchange Rate Change: Another bad year for the US Dollar, highest yearly changes in NZDUSD, EURUSD, and USDCHF.
Year 2003: Forex Statistics
■ Market Volatility: The Average Market Volatility for 2003 was 1.08% Intraday (a high increase of 22.06%) and 1.11% Daily (+22.33%).
■ Daily Volume: The average daily volume at 110.18 billion USD, almost unchanged compared to 2003.
■ Yearly Exchange Rate Change: The US Dollar continues to drop against almost all majors. Highest changes on AUDUSD and NZDUSD.
Year 2004: Forex Statistics
■ Market Volatility: The Average Market Volatility for 2004 at 1.21% (both daily and intraday). High volatility indicates a good year for trading Forex.
■ Daily Volume: The average daily volume dropped 44.38%, average daily volume at 61.25 billion USD.
■ Yearly Exchange Rate Change: US Dollar drops against all majors.
Year 2005: Forex Statistics
■ Market Volatility: The Average Market Volatility at 1.00% Daily and 1.01% Intraday.
■ Daily Volume: The Average daily volume booms compared to 2004, and averages at 564.64 billion USD
■ Yearly Exchange Rate Change: The US Dollar comes back and appreciates against all majors.
Year 2006: Forex Statistics
■ Market Volatility: The Average Market Volatility decreased compared to 2005, at 0.94% Intraday and 0.95% Daily.
■ Daily Volume: The average daily volume is at a new record high (1,633 billion USD).
■ Yearly Exchange Rate Change: After a good year (2006) for the US Dollar, the Euro, and the British Pound gained ground against the USD.
Year 2007: Forex Statistics
■ Market Volatility: The Average Market Volatility increases compared to the previous year but remains low, 0.99% Intraday and 0.99% Daily.
■ Daily Volume: The average daily volume significantly decreased by 33.12% to 1,092.5 billion USD.
■ Yearly Exchange Rate Change: Another bad year for the US Dollar.
Year 2008: Forex Statistics
■ Market Volatility: The Average Market Volatility booms at 1.72% Intraday and 1.66% Daily.
■ Daily Volume: The average daily volume drops 55.86% to 482 billion USD.
■ Yearly Exchange Rate Change: The US Dollar recovers against all majors except against the Japanese Yen and the Swiss Franc.
Year 2009: Forex Statistics
■ Market Volatility: The Average Market Volatility for 2009 remains very high at 1.65% Intraday and 1.68% Daily.
■ Daily Volume: The average daily volume is down by 25.61% at 358.7 billion USD.
■ Yearly Exchange Rate Change: US Dollar drops against all majors.
Year 2010: Forex Statistics
■ Market Volatility: The Average Market Volatility was relatively high, at 1.38% Daily and 1.39% on Intraday.
■ Daily Volume: The Average daily volume drops 27.71% compared to 2009.
■ Yearly Exchange Rate Change: The year 2010 was a good year for AUD and NZD and a bad year for the Japanese Yen.
Year 2011: Forex Statistics
■ Market Volatility: The Average Market Volatility for 2011 at 1.24% Intraday and Daily.
■ Daily Volume: The total average daily volume continues to drop to 147.7 billion USD.
■ Yearly Exchange Rate Change: Not important changes in the values of the 7 major exchange rates.
Year 2012: Forex Statistics
■ Market Volatility: The Average Market Volatility drops to 0.86% on Intraday and 0.87% Daily.
■ Daily Volume: The average daily volume was unchanged compared to 2011, at about 142.3 billion USD.
■ Yearly Exchange Rate Change: Not important changes except the USDJPY.
Year 2013: Forex Statistics (8 month)
■ Market Volatility: The Average Market Volatility for the first 8 months of 2013 was increased by 1.01% on Intraday and 1.01% Daily.
■ Daily Volume: The average daily volume at 136.9 billion USD.
■ Yearly Exchange Rate Change: The US Dollar moves strongly against the Japanese Yen and the Australian Dollar and drops against the Euro.
■ Forex Market Statistics 2000-2013
Researched and Edited by Giorgos Protonotarios, Financial Analyst
FxPros.net (c)