How the Foreign Exchange Market Works

The Extraordinary Size of the Foreign Exchange Markets

The quantities traded in foreign exchange markets are breathtaking. A 2013 Bank of International Settlements survey found that $5.3 trillion per day was traded on foreign exchange markets, which makes the foreign exchange market the largest market in the world economy. In contrast, 2013 U.S. real GDP was $15.8 trillion per year.

Table shows the currencies most commonly traded on foreign exchange markets. The U.S. dollar dominates the foreign exchange market, followed by the euro, the British pound, the Australian dollar, and the Japanese yen.

Currency % Daily Share
U.S. dollar 87.6%
Euro 31.3%
Japanese yen 21.6%
British pound 12.8%
Australian dollar 6.9%
Canadian dollar   5.1%
Swiss franc   4.8%
Chinese yuan   2.6%
Currencies Traded Most on Foreign Exchange Markets as of April, 2016 (Source: http://www.bis.org/publ/rpfx16fx.pdf)
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