Foreign Exchange Market Statistics 2000-2013
The Forex Market
The Forex (Foreign Exchange) market is a decentralized, over-the-counter (OTC) financial market where currencies are traded. Operating 24 hours a day through an electronic network of banks (ECNs), Forex is one of the most liquid and dynamic markets in the world. Daily trading volume is estimated to exceed $4 trillion, with the vast majority—approximately 90%—driven by speculative trading, primarily from day traders.
Structure of the Forex Market
The modern free-floating Forex system began in 1971 following the collapse of the Bretton Woods agreement. Online retail Forex trading gained momentum in the late 1990s with the advent of internet-based platforms. The Forex market operates continuously from Sunday at 5:00 PM EST to Friday at 4:00 PM EST, starting in the Asia-Pacific region and moving through the Middle East, Europe, and North America in a 24-hour cycle.
Most Traded Currencies
The U.S. Dollar (USD) remains the most actively traded currency in the Forex market, involved in about 85% of all transactions. It is followed by the Euro (EUR) at approximately 39%, and the Japanese Yen (JPY) at around 19%. Because each trade involves a currency pair, total percentages add up to 200%, rather than 100% as in most other financial markets.
Chart: Most Traded Forex Currencies
The most traded currency pairs in the Foreign Exchange market:
- 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
Some of the most actively traded Forex cross currency pairs (crosses) include:
- EUR/JPY (Euro / Japanese Yen)
- EUR/GBP (Euro / British Pound)
- EUR/CHF (Euro / Swiss Franc)
- GBP/JPY (British Pound / Japanese Yen)
- GBP/CHF (British Pound / Swiss Franc)
These pairs do not involve the U.S. Dollar and are commonly traded for diversification and regional exposure.
Forex Market Size (Based on BIS Data)
The Forex market is the largest and most liquid financial market in the world, with an average daily turnover exceeding $4 trillion, according to the Bank for International Settlements (BIS). This makes the Forex market approximately 12 times larger than the global equity markets. To put its scale in perspective, the annual Forex turnover is estimated to be 10 times greater than the global Gross Domestic Product (GDP).
Major Forex Markets
The New York and London Forex sessions dominate the global currency market, together accounting for roughly 50% of daily trading volume. Notably, around 65% of New York session activity occurs during the morning, coinciding with the overlap of the New York and European sessions—a period known for heightened volatility and liquidity.
Table: Geographical Distribution of Forex Market Volume
|
Foreign Exchange -Market Center |
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% |
Concentration of Forex Volume Among Major Banks
Forex trading activity is heavily concentrated among a small number of large financial institutions. In the United States, seven major banks are responsible for approximately 75% of the country’s total currency trading volume. A similar pattern is observed in Japan and the United Kingdom, where seven banks also account for around 75% of national Forex turnover.
In Switzerland, the concentration is even higher—just two banks handle about 75% of the nation's total Forex activity. On a global scale, 10 major financial institutions control roughly 73% of the entire Forex market volume. Among the leading players are UBS and Deutsche Bank, both of which are recognized as dominant forces in the global currency market.
Historical Forex Volatility – Analytical Insights
FxPros.net has conducted a comprehensive analysis of historical volatility across major Forex currency pairs. This research provides valuable insights into the long-term behavior and risk characteristics of the major currencies.
Forex Statistics by Year
Year 2000
-
Market Volatility: Average volatility was moderate, at 1.04% daily and 1.06% intraday.
-
Daily Volume: Averaged $89.72 billion per currency, totaling approximately $628 billion across the seven major currencies.
-
Exchange Rate Trends: A strong year for the Japanese Yen, while the U.S. Dollar appreciated against the Euro, Australian Dollar (AUD), and New Zealand Dollar (NZD).
Year 2001
-
Market Volatility: Slight decline to 1.01% daily (-2.65%) and 1.04% intraday (-4.21%).
-
Daily Volume: Increased to $98.5 billion (+9.77%). Significant volume growth in USD/JPY (+34.5%) and EUR/USD (+38.9%).
-
Exchange Rate Trends: Continued strength for the Japanese Yen. The U.S. Dollar weakened against the Euro and other majors.
Year 2002
-
Market Volatility: Declined further to 0.91% daily (-10.7%) and 0.89% intraday (-12.3%).
-
Daily Volume: Rose to approximately $108.77 billion.
-
Exchange Rate Trends: Another weak year for the U.S. Dollar, with significant movements in NZD/USD, EUR/USD, and USD/CHF.
Year 2003
-
Market Volatility: Rebounded to 1.11% daily (+22.33%) and 1.08% intraday (+22.06%).
-
Daily Volume: Stable at around $110.18 billion.
-
Exchange Rate Trends: Continued depreciation of the U.S. Dollar, with the largest moves in AUD/USD and NZD/USD.
Year 2004
-
Market Volatility: Increased to 1.21% daily and intraday, indicating strong trading opportunities.
-
Daily Volume: Dropped significantly to $61.25 billion (-44.38%).
-
Exchange Rate Trends: The U.S. Dollar declined across all major pairs.
Year 2005
-
Market Volatility: Normalized at 1.00% daily and 1.01% intraday.
-
Daily Volume: Surged to $564.64 billion, a strong recovery from 2004.
-
Exchange Rate Trends: The U.S. Dollar strengthened against all major currencies.
Year 2006
-
Market Volatility: Decreased to 0.95% daily and 0.94% intraday.
-
Daily Volume: Reached a record high of $1,633 billion.
-
Exchange Rate Trends: After gains early in the year, the Euro and British Pound appreciated against the U.S. Dollar.
Year 2007
-
Market Volatility: Slightly higher at 0.99% daily and intraday, though still relatively low.
-
Daily Volume: Dropped by 33.12% to $1,092.5 billion.
-
Exchange Rate Trends: The U.S. Dollar continued to weaken.
Year 2008
-
Market Volatility: Spiked to 1.66% daily and 1.72% intraday, reflecting global financial uncertainty.
-
Daily Volume: Fell sharply by 55.86% to $482 billion.
-
Exchange Rate Trends: The U.S. Dollar rebounded against most currencies, except the Japanese Yen and Swiss Franc.
Year 2009
-
Market Volatility: Remained elevated at 1.68% daily and 1.65% intraday.
-
Daily Volume: Decreased to $358.7 billion (-25.61%).
-
Exchange Rate Trends: The U.S. Dollar declined across the board.
Year 2010
-
Market Volatility: High at 1.38% daily and 1.39% intraday.
-
Daily Volume: Dropped 27.71% from the previous year.
-
Exchange Rate Trends: Strong performance by AUD and NZD; weak performance by the Japanese Yen.
Year 2011
-
Market Volatility: Decreased to 1.24% daily and intraday.
-
Daily Volume: Continued decline to $147.7 billion.
-
Exchange Rate Trends: Minimal changes across the seven major currency pairs.
Year 2012
-
Market Volatility: Dropped further to 0.87% daily and 0.86% intraday.
-
Daily Volume: Largely unchanged at $142.3 billion.
-
Exchange Rate Trends: Limited movement overall, except for USD/JPY.
Year 2013 (First 8 Months)
-
Market Volatility: Rose modestly to 1.01% daily and intraday.
-
Daily Volume: Averaged $136.9 billion.
-
Exchange Rate Trends: The U.S. Dollar strengthened against the Japanese Yen and Australian Dollar, but weakened against the Euro.
■ Forex Market Statistics 2000-2013
Researched and Edited by Giorgos Protonotarios, Financial Analyst
FxPros.net (c)