Today's forex Market

Written by Research | 04 January 2010

A More Competitive Forex Market for 2010

The Foreign Exchange market better known as the "Forex" market is considered to be the single largest financial market in terms of volume transactions composing of the European, Asian and the US markets. Its’ volume thus far exceeds any other markets combined.

Even the New York Stock exchange and the New York Mercantile exchange can not surpass the amount of transactions made by the interbank foreign exchange trading.  The markets single trading volume accounts for over 3.98 trillion US dollars daily. As such, it has been referred to as the market closest to the ideal perfect competition, notwithstanding market manipulation by central banks. According to the Bank for International Settlements, average daily turnover in global foreign exchange markets is estimated at $3.98 trillion. Trading in the world's main financial markets accounted for $3.21 trillion of this.

This approximately $3.21 trillion in main foreign exchange market turnover was broken down as follows:

$1.005 trillion in spot transactions
$362 billion in outright forwards
$1.714 trillion in foreign exchange swaps
$129 billion estimated gaps in reporting

And the biggest trading volume is the European session where it meets Asia and the US trading markets. The Foreign Exchange Market operates as a basic supply and demand model for the worlds’ major currencies as a free market place where institutional banks, corporations, hedge funds, traders and investor / clients meet to buy / sell, hedge, and speculate currencies traded worldwide.

Economist as well as analysts and professional traders do regard the Foreign exchange market as the most efficient and free marketplace in the world. A free flowing of price movements are traded every single day, close to 24 hours of continuous daily trades until Friday at the end of business in the US market. And then starts at the beginning week of Sunday in Asia.