Transactions in the Foreign Exchange Market
Transactions in the Foreign Exchange Market (4 of 6)
• Size of the Foreign Exchange Market
– A 2016 survey estimated daily global net turnover in the foreign exchange market to be $5.1 trillion, a 5% decline from its peak in 2013
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Exhibit 5.6 Global Foreign Exchange Market Turnover, 1989–2016
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Transactions in the Foreign Exchange Market (5 of 6)
• Geographical Distribution
– London continues to be the world’s major foreign exchange market in traditional foreign exchange market activity with 37% of the global market, followed by the New York with 19%
– Currency trading in Asia is growing due to the growth of the Asian economies, markets, and currencies
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Exhibit 5.7 Top 6 Geographic Trading Centers in the FX Market
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Transactions in the Foreign Exchange Market (6 of 6)
• Currency Composition
– The currency composition of trading indicates a number of global shifts
§ The U.S. dollar increased its presence in global currency trades
§ The Japanese yen and the European euro both showed declines
§ The Chinese renminbi’s proportion, although small, has recently doubled
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Exhibit 5.8 Daily FX Trading by Currency Pair (percent of total) (1 of 2)
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