Forex

Forex Definition: Foreign currency exchange or the trading of one currency for another

Global Reserve Currencies = Total World Savings Is Kept In These Forms
US Dollar = 62.2%
Euro = 27.3%
Pound Sterling = 4.3%
Japanese Yen = 3.0%
Swiss Franc = 0.1%
All Other Currencies Combined = 3.1%

Global GDP = $58.07 trillion USD as of 2009
Global GDP Per Capita = $7,178 USD as of 2009
Global People Paid Below $2 per day = 3.25 billion 50% of World Population as of 2009
Global Millionaires US$ = 9 million 0.15% as of 2006
Global Billionaires US$ = 793 as of 2009
GDP Per Capita United States = $46,381 USD as of 2009
GDP Per Capita United Kingdom = $34,619 USD as of 2009
GDP Per Capita Luxembourg = $78,395 USD as of 2009 (Borders France and Germany)
GDP Per Capita Japan = $32,608 USD as of 2009
GDP Per Capita China = $6,567 USD as of 2009
GDP Per Capita India = $2,941 USD as of 2009
GDP Per Capita Congo, Zimbabwe, Burundi = $300 USD as of 2009

�- World GDP 57,937,460,000,000
01 European Union 16,447,259,000,000
01 United States 14,256,275,000,000
02 Japan 5,068,059,000,000
03 China 4,908,982,000,000
04 Germany 3,352,742,000,000
05 France 2,675,951,000,000
06 United Kingdom 2,183,607,000,000
07 Italy 2,118,264,000,000
08 Brazil 1,574,039,000,000
09 Spain 1,464,040,000,000
10 Canada 1,336,427,000,000

The major currency pairs outlined below account for over 75% of daily foreign exchange volume. It is worth noting that the US dollar is a part of all of the major currency pairs, a fact resulting largely from the US dollar�s role as the world�s reserve currency. Japan has historically had an export-driven economy, and thus the Bank of Japan � the central bank that regulates the value of the yen � has intervened to ensure that the yen remains weak, and thus conducive to sustaining an economy of exports. Swissy holds a place among the major currency pairs due to Switzerland's unique status as a global investment haven. Some estimates are that nearly one-third of the world's private assets are held in Switzerland.

Euro/US Dollar EUR/USD = 28 percent of daily global volume
US Dollar/Japanese Yen USD/JPY = 17 percent of daily global volume
Great Britan Pound/US Dollar GBP/USD = 14 percent of daily global volume
Australian dollar/US Dollar AUD/USD = 5% percent of daily global volume
US Dollar/Swiss Franc USD/CHF = 4% percent of daily global volume
US Dollar/Canadian Dollar USD/CAD = 4% percent of daily global volume
Euro/Japanese Yen EUR/JPY = 2% percent of daily global volume
All Other Currency Pairs Combined = 26% percent of daily global volume
Source = Bank for International Settlements www.bis.org

Daily trading volume currently averages $3 Trillion in 2009
Trading in London accounted for 44% of total volume
Europe Excluding The UK 9% of total volume
US accounted for 19% of total volume
Japan accounted for 7% of total volume
Australia accounted for 5% of total volume
Hong Kong and Singapore combined 9% of total volume
an assortment of other financial centers splitting the remaining 7%.

London is by far the most active trading center, handling something close to $1.5 trillion in flows per day on average. It does roughly twice what second place NY does, with NY being a little higher than the Sydney/Signapore combined total. (Note: Tokyo was not included in the study, nor was anything from the Europen Continent).

The spot forex market is not the largest component of forex trading, despite what you might have heard. It's actually the swap market which is the largest part. Given that most forex trading is actually related to international trade and capital flows, this really shouldn't come as a surprise. Interestingly, though, spot trading is by far the biggest part of forex trading in the NY market.

In NY trading, EUR/USD accounts for about a third of all forex action. USD/JPY is about 20%. The trio of EUR/JPY, GBP/USD, and USD/CAD make up the rest of the pairs accounting for 75% of the trading activity on average.

EUR/USD is actually approximately 40% of London trading. USD/JPY is still in second position, but at a lesser amount than in NY trading 15%. GBP/USD is slightly less than USD/JPY. The group of EUR/JPY, EUR/GBP, and USD/CHF make up the rest of the top 75%.

Not surprisingly, AUD/USD is the biggest pair traded in Sydney (about 25%), but EUR/USD and USD/JPY are the next two most active pairs, and in Signapore they are also 1/2 as they are in the rest of the world.

So the bottom line is that the EUR/USD, USD/JPY and GBP/USD are the most actively traded currency pairs in the forex market.