The foreign
exchange market is vast. Every day $1,600 billion is
traded through thousands of dealing rooms in dozens of
countries throughout the world. Amazingly, this figure
is greater than the global equity markets (shares) trade
in an entire year. 95% of this amount is traded for
speculative gain and is largely accounted for by banks
trading with each other, known as ‘inter-bank’ trading.
However, this still means that £ 80 billion is traded
daily for commercial reasons for both businesses and
private investors alike.
The UK is by far
the world’s largest financial market. In fact UK trades
a greater volume than the financial markets of New York
and Hong Kong
Put together.
This is partly due to the historical significance of
London as a world-trading centre and partly because of
the time zone advantage the UK has over other countries,
which enables it to cover both European and US hours of
trade.
The market opens
in the Far East on Sunday evening (UK time) and trades
continuously through the Middle East, Europe, London and
the US. The only break on operations comes between
Friday night close in the UK and Sunday night opening in
New Zealand.