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The Foreign Exchange Market
The foreign exchange market is the world’s largest trading exchange, far surpassing the total value of all bond and stock transactions throughout the world. Currencies are traded 24 hours a day from Sunday 5 P.M. EST to Friday 5 P.M EST in major foreign exchanges in London, Tokyo, New York, and Sydney.
Eric Chiang
The most traded currencies in the world are shown. Because each transaction involves two currencies, the percentages add up to 200%. The U.S. dollar is involved in a significant portion of all foreign exchanges transactions.
Chris Angrisani/Illustration Source
Mark Wilson/Getty Images
Approximately twenty nations maintain a fixed exchange rate with the U.S. dollar. The following are selected currencies pegged to the U.S. dollar.
Foreign exchange swaps, or contracts to buy and sell a fixed amount of foreign currency on two different dates, are the most common type of foreign exchange transaction, followed by spot transctions, which are foreign currency trades at the current exchange rate. The remaining 20% includes other foreign exchange trades such as option and futures.