The foreign exchange industry is the largest financial market in the world, with an average daily turnover of $3.2 trillion – this is 10 times more than the average daily turnover of global equity markets and equates to nearly $500 a day for every man, woman, and child on earth.
The US & UK markets account for just over 50% of this turnover. The major markets can be found in London, New York and Tokyo, which also house the main trading centers along with Singapore.
The US dollar is involved in over 80% of all foreign exchange transactions, equivalent to over $2.7 trillion per day, whilst $1,109bn in foreign exchange is turned over each day in London alone, which is 32% of the global share.
Exchange rate fluctuations are usually caused by actual monetary flows, as well as by expectations of changes in monetary flows caused by changes in GDP growth, inflation, interest rates and trade deficits.
