Overview of Global Forex Markets

HONG KONG - Sept. 16, 2025 - PRLog -- The foreign exchange (FX) market is the world's largest and most liquid financial market, shaping capital flows, trade, and financial stability. Below is a research-backed snapshot of where FX stands today: its size, structure, and key players, followed by the structural shifts likely to define its next chapter.

The market today: size, instruments, and who trades what
Growth since 2019 was modest by historical standards at just 14%. Composition continues to tilt away from spot toward derivatives: FX swaps dominated with $3.8 trillion daily (51% of turnover), while spot accounted for $2.1 trillion (28%). Outright forwards made up 15%, with options and currency swaps together around 6%.

Currency hierarchy: still dollar-centric, but edges move slowly
On the trading side, the U.S. dollar remains the linchpin, on one side of ~88% of all FX transactions. The euro participates in ~31%, yen ~17%, and sterling ~13%. The renminbi (RMB) rose to ~7%, now 5th most traded by turnover. (Source: BIS Triennial 2022 summary).

Geography: London still #1, but Asia is gaining
FX trading remains concentrated in a handful of hubs. In April 2022, five locations: the UK (38%), the US (19%), Singapore (9%), Hong Kong SAR (7%), and Japan (4%), accounted for 78% of global turnover.

Macro forces to watch: rates, fragmentation, and liquidity plumbing
Three macro undercurrents will steer FX over the next cycle:

1. Interest rate differentials and hedging demand.
2. Geopolitics and economic fragmentation.
3. Market structure and best execution.

The near-future scenarios: what could change?
1) Payments and settlement are becoming faster, safer, and more programmable.
2) Dollar dominance remains, but the periphery deepens.
3) Regulation and codes of conduct evolve from principles to proofs.
4) Expect wholesale FX settlement to tilt decisively toward a "risk-waterfall" regime

Practical takeaways for market participants

• Treasurers and asset managers should expect tight pricing in major pairs but higher hedging costs and balance-sheet pressure around reporting dates.
• Differentiate via SDP UX, smart routing, and client analytics. Stay aligned with the revised FX Global Code and enhance disclosure cover sheets. (Source: GFXC-Dec 2024 update).
• Prioritize PvP expansion and interoperability pilots to curtail settlement risk and enable safer cross-border flows. (Source: BIS CPMI 2025).

Conclusion
Today's FX market remains dollar-centric, London-anchored, and derivatives-heavy, with electronification deepening and risk governance tightening. The future is likely to feature faster, safer cross-border settlement, wider PvP coverage, and incremental multipolarity in reserves and payments, not a wholesale regime change.

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