Forex Market Dynamics

Daily volumes estimated rising to 3 trillion US Dollars worldwide do vouch for the extremely impressive liquidity, breadth and depth of Foreign Exchange market. Based on semi-annual London, New York, Tokyo and Singapore Foreign Exchange Committee data, the average daily global turnover totaled USD 2.7 trillion in traditional foreign exchange market transactions in April 2006. This volume is more than 10 times the size of collective daily turnover on all the equity markets in the world! Including non-traditional foreign exchange derivatives and exchange traded products, the overall turnover could be estimated to average US$ 2.9 trillion a day approximately. - An incredibly impressive liquidity that makes foreign exchange market the largest and most liquid financial market in the world!

EUR/USD and USD/JPY are the world's most actively traded currency pairs. Their exchange rates can change up to 18,000 times during a single day!

Main Forex Markets: London, New York, Tokyo and Singapore. In terms of importance order, the foreign exchange trading centers can be placed as: London, New York, Tokyo, Singapore, Frankfurt, Geneva & Zurich, Paris and Hong Kong. The largest chunk of daily foreign exchange trading volumes comes from the United Kingdom out of all financial centers across the world while the U. K.'s own currency - Sterling Pound - is less widely traded compared to many others. As the graph shows above, the United Kingdom. accounts for approximately 32% of the total global volumes, the U.S. comes second with about 18% and Japan is ranked third with 8% share.

A truly 24 hours market - Foreign Exchange market follows the Sun around the Earth! Each business day starts from the Asia-Pacific financial centers: First Wellington, New Zealand ...then Sydney, Australia ...followed by Tokyo, Hong Kong and Singapore. While those markets are still active, trading begins a few hours later in Bahrain and in the Middle East. When it is late in the business day in Tokyo, foreign exchange markets in Europe open for business. Thereafter, while it is early afternoon in Europe, trading in New York and other U.S. financial centers commences. In the end, when it is around late afternoon in the United States, the next business day has already arrived in Wellington and another 24 hours foreign exchange trading business cycle has begun! Currency trading continues non-stop around the world excluding weekends. In a scenario where the Asian trading session is overlapped by the European session and the European session is overlapped by the U.S. trading session, there are always some financial centers open and currencies like Euro, US Dollar, Japanese Yen etc. are being bought or sold!! - Isn't it amazing?

Foreign Exchange is an "Over The Counter" (OTC) Market. Means ...no central exchange and no clearing house. It is an inter-banks market where exchange rates are quoted and transactions are executed between banks and other financial institutions. Many non-financial institutions that also participate include brokers, market-makers, investment firms, pension funds and hedge funds.

Almost Nil or No "Insider Information" in Foreign Exchange market! All have access to the same market news or official report at the same time because such information is officially released and made public, often on scheduled date and time.