The euro and U.S. dollar made up more than seven of 10 SWIFT payments worldwide in 2024, outperforming many other currencies. This is according to a monthly report meant to track the market share of China's yuan renminbi within the international bank transfer system SWIFT. Although China holds the largest forex reserves in the world, the yuan ranked as the eighth-used currency in international payments. The figures concern customer-initiated and institutional payments and exclude trade. Discussions on the potential weakening role of the U.S. dollar especially touch world trade and forex. For example, the share of the USD in forex reserves declined visibly against the euro and Japanese yen in 2023. What sparked this de-dollarization trend, and will it continue? Trade sanctions and de-dollarization De-dollarization in 2023 is mentioned mostly alongside trade and the BRICS countries - an informal name given to Brazil, Russia, India, China, and South Africa. The combined GDP of BRICS is about 25 percent of the world's economy. After the start of the Ukraine war and Russia received economic sanctions, the BRICS slowly evolved into a trading bloc. The group increasingly wanted its own currency to settle payments within the trade bloc, to avoid using the U.S. dollar. In August 2023, BRICS will gather in South Africa to discuss the creation of such a new joint currency. Additionally, 19 countries - including Argentina, Algeria, Egypt, Saudi Arabia, Turkey, and Yemen - expressed interest in joining the BRICS group. CBDC, or projects into a digital payment settlement A factor of future uncertainty for the U.S. dollar is how central bank digital currencies (CBDC) develop in emerging countries. Several projects exist between individual countries that specifically target cross-border interbank payments. A cooperation between Thailand and Hong Kong, Inthanon-Lionrock, ranks as the most advanced of these projects. CBDC does not require the U.S. dollar to function. Tangible such as commodities or gold can back them. The value of transactions processed with CBDC is to grow by 260,000 percent between 2023 and 2030.

The U.S. dollar was the most common currency in foreign exchange reserves in 2023, comprising more than three times the amount of the euro in global reserves that year. This total peaked in 2015, partly due to the strength of the dollar during the Eurozone crisis. The share of the U.S. dollar has lost since to the Japanese yen and euro, as well as other currencies. Why do foreign exchange reserves matter? When countries with different currencies export goods, they must agree on a currency for payment. As a result, countries hold currency reserves worth trillions of U.S. dollars. After World War II, the U.S. dollar itself became the international currency in the Bretton Woods Agreement and is thus the most common currency for international payments. The United States Treasury is also seen by most as risk-free, giving the country a low-risk premium. For this reason, countries hold U.S. dollars in reserve because the currency holds value relatively well eventually. China and currency reserves Since 2016, the International Monetary Fund has included the Chinese renminbi (yuan) as part of the Special Drawing Rights (SDR) basket. This decision recognized the influence of the renminbi as a reserve currency, particularly in several Asian countries. China also holds significant foreign exchange reserves itself, funded by its large positive trade balance.

The European Union has seen a declining share of its exports to the rest of the world paid for in Euro over the period since 2010. At the same time, the share of exports paid for in U.S. dollars increased up until 2018, before declining drastically in 2020, likely to the impact of the COVID-19 pandemic on global trade. The share of exports paid for in other currencies of non-Euro members took a large leap in 2020, to over a fifth of the EU's global export trade, likely due to the United Kingdom's exit from the EU meaning that the British Pound was moved into this category from the EU member currencies category.

In 2024, the total value of U.S. trade goods amounted to approximately 5.4 trillion U.S. dollars. This shows the significance and scale of international trade for the economy of the United States. In 2024, the United States imported goods valuing around 3.3 trillion U.S. dollars from international trading partners, in comparison the value of goods exported from the United States to other countries amounted to around 2.1 trillion U.S. dollars.Import and export trade The import of trade goods relate to goods brought into the United States. This typically refers to goods grown, produced, or manufactured in other countries. Imports include goods of domestic origin which have been worked on abroad before reentering the United States. The export of trade goods refer to goods sold internationally which were grown, produced, or manufactured in the United States. It also includes commodities of foreign origin which have been changed in the United States from the form in which they were imported, or which have been enhanced in value or condition by further processing or manufacturing within the United States before again being sold internationally. Leading trade partners of the United States In 2023, Mexico was the largest source of goods imported into the United States, with goods valuing approximately 475.6 billion U.S. dollars. Mexico and Canada were the second and third largest exporters of goods to the United States, respectively. In 2023, Canada was the leading destination of goods exported from the United States, with U.S. trade goods worth over 350 billion U.S. dollars exported to Canada. Mexico and China also feature at the top of the list of importers of U.S. goods.

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Foreign Exchange Market Size 2025-2029

The foreign exchange market size is forecast to increase by USD 582 billion at a CAGR of 10.6% between 2024 and 2029.

The market continues to evolve, driven by several key trends and challenges. One significant trend is the increasing use of money transfer agencies, venture capital investments, and mutual funds in foreign exchange transactions. The Internet of Things (IoT) and artificial intelligence (AI) revolutionize banking and financial services, enabling real-time personal finance software and content delivery for travelers and businesses. The uncertainty of future exchange rates fuels the demand for 24x7 trading opportunities. As urbanization progresses and digitalization becomes more prevalent, the market is expected to grow, offering numerous opportunities for businesses and investors.

What will be the Size of the Foreign Exchange Market During the Forecast Period?

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The market, also known as the forex or FX market, is a decentralized global market for the trading of currencies. It facilitates the conversion of one currency into another for various reasons, including international trade, tourism, hedging, speculation, and investment. Participants in this market include financial institutions, non-financial customers, individuals, retailers, corporate institutes, and central banks. Currencies are traded 24 hours a day, five days a week, due to the presence of multiple time zones and the interbank network.
Currency swaps, interest rate differentials, monetary interventions, economic indicators, political developments, and investment flows are some of the key drivers influencing the market. International trade, balance of payments, and economic instability in various countries also significantly impact currency values. Speculation and hedging activities, particularly by corporations and financial institutions, contribute to the volatility of currency rates. The market is increasingly leveraging artificial intelligence and Internet of Things technologies to optimize trading strategies, with mutual funds utilizing these advancements to enhance portfolio performance and manage currency risk more efficiently. The forex market plays a crucial role in facilitating international business transactions and managing risks associated with currency fluctuations.

How is this Foreign Exchange Industry segmented and which is the largest segment?

The industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.TypeReporting dealersFinancial institutionsNon-financial customersTrade Finance InstrumentsCurrency swapsOutright forward and FX swapsFX optionsCounterpartyReporting DealersOther Financial InstitutionsNon-Financial CustomersGeographyNorth AmericaCanadaUSEuropeGermanyUKAPACChinaIndiaJapanSouth AmericaBrazilMiddle East and Africa

By Type Insights

The reporting dealers segment is estimated to witness significant growth during the forecast period. The market, also known as Forex or FX, is a global financial market where participants buy, sell, and exchange currencies. This market involves various market participants, including financial institutions, non-financial customers, and corporations. Currency swaps, individuals, retailers, corporates, hedge funds, wealth managers, and foreign exchange services are among the key players. The markets facilitate international trade and investment flows, with economic indicators, political developments, inflationary pressures, and interest rate differentials influencing currency values. Monetary interventions, speculation, and risk appetite are also significant factors.
Modern technology and electronic platforms have increased efficiency and accessibility, enabling 24-hour operation. Currency exchange services, monetary policies, and regulations, including those by central banks, impact the market. Economic events, financial crises, and strategic corporate activities can cause volatility. Hedging strategies, accessible platforms, and personal finance considerations are essential for individual investors, small businesses, and multinational corporations dealing with major currency pairs. Online trading platforms and trade balances are crucial for managing currency risks in an increasingly globalized business environment.

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The Reporting dealers segment was valued at USD 278.60 billion in 2019 and showed a gradual increase during the forecast period.

Currency pairs are the foundation of forex trading, with spot trading being one of the most common methods of buying and selling currencies. Forward contracts and swap deals offer traders the ability to lock in exchange rates for future transactions, managing ris

This page displays a table with United States Imports By Country in U.S. dollars, according to the United Nations COMTRADE database on international trade.

The foreign exchange (Forex) market is a global decentralized market for the trading of currencies. It is the largest financial market in the world, with an average daily trading volume of over $5 trillion. The market size is expected to reach $84 million by 2033, growing at a CAGR of 5.83% during the forecast period 2025-2033. Key drivers of the Forex market growth include increasing international trade, rising foreign direct investment, and growing demand for hedging and speculation. The market is also being driven by the increasing use of online trading platforms and the growing popularity of cryptocurrencies. The major players in the Forex market include Deutsche Bank, UBS, JP Morgan, State Street, XTX Markets, Jump Trading, Citi, Bank of New York Mellon, Bank America, and Goldman Sachs. The market is segmented by type (spot Forex, currency swap, outright forward, Forex swaps, Forex options, other types), counterparty (reporting dealers, other financial institutions, non-financial customers), and region (North America, South America, Europe, Middle East & Africa, Asia Pacific). Recent developments include: In November 2023, JP Morgan revealed the introduction of novel FX Warrants denominated in Hong Kong dollars in the Hong Kong market, marking its status as the inaugural issuer in Asia to present FX Warrants featuring CNH/HKD (Chinese Renminbi traded outside Mainland China/Hong Kong dollar) and JPY/HKD (Japanese Yen/Hong Kong dollar) as underlying currency pairs. These fresh FX Warrants are set to commence trading on the Hong Kong Stock Exchange., In October 2023, Deutsche Bank AG finalized its purchase of Numis Corporation Plc. The integration of both brands under the name 'Deutsche Numis' underscores their collective influence and standing in the UK and global markets. 'Deutsche Numis' emerges as a prominent entity in UK investment banking and the preferred advisor for UK-listed companies. This acquisition aligns with Deutsche Bank's Global Hausbank strategy, aiming to become the primary partner for clients in financial services and fostering stronger relationships with corporations throughout the United Kingdom., In June 2023, UBS successfully finalized the acquisition of Credit Suisse, marking a significant achievement. Credit Suisse Group AG has merged into UBS Group AG, forming a unified banking entity.. Key drivers for this market are: International Transactions Driven by Growing Tourism Driving Market Demand, Market Liquidity Impacting the Foreign Exchange Market. Potential restraints include: International Transactions Driven by Growing Tourism Driving Market Demand, Market Liquidity Impacting the Foreign Exchange Market. Notable trends are: FX Swaps is leading the market.

This page displays a table with United States Exports By Country in U.S. dollars, according to the United Nations COMTRADE database on international trade.

External balance on goods and services (formerly resource balance) equals exports of goods and services minus imports of goods and services (previously nonfactor services). Data are in current U.S. dollars.

The largest share of settlements for Russian imports of goods and services from other countries was in currencies of the countries that the country's government put on a list of territories committing unfriendly actions. These included U.S. dollars, euros, and currencies of other regions that sanctioned Russia over the war in Ukraine. In the settlements for exports from Russia, the share of Russian rubles stood at almost 40 percent in 2023.

This page displays a table with China Exports By Category in U.S. dollars, according to the United Nations COMTRADE database on international trade.

This page displays a table with China Imports By Country in U.S. dollars, according to the United Nations COMTRADE database on international trade.

Mexico MX: Goods Trade: % of GDP data was reported at 73.122 % in 2017. This records an increase from the previous number of 71.579 % for 2016. Mexico MX: Goods Trade: % of GDP data is updated yearly, averaging 29.708 % from Dec 1960 (Median) to 2017, with 58 observations. The data reached an all-time high of 73.122 % in 2017 and a record low of 9.763 % in 1972. Mexico MX: Goods Trade: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Mexico – Table MX.World Bank.WDI: Trade Statistics. Merchandise trade as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all in current U.S. dollars.; ; World Trade Organization, and World Bank GDP estimates.; Weighted average;

Slovenia SI: Goods Trade: % of GDP data was reported at 211.794 % in 2023. This records a decrease from the previous number of 232.216 % for 2022. Slovenia SI: Goods Trade: % of GDP data is updated yearly, averaging 121.490 % from Dec 1992 (Median) to 2023, with 32 observations. The data reached an all-time high of 232.216 % in 2022 and a record low of 82.170 % in 1999. Slovenia SI: Goods Trade: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Slovenia – Table SI.World Bank.WDI: Trade Statistics. Merchandise trade as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all in current U.S. dollars.;World Trade Organization, and World Bank GDP estimates.;Weighted average;

United Kingdom UK: Goods Trade: % of GDP data was reported at 41.528 % in 2017. This records an increase from the previous number of 39.457 % for 2016. United Kingdom UK: Goods Trade: % of GDP data is updated yearly, averaging 37.803 % from Dec 1960 (Median) to 2017, with 58 observations. The data reached an all-time high of 45.255 % in 1977 and a record low of 29.045 % in 1967. United Kingdom UK: Goods Trade: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s United Kingdom – Table UK.World Bank.WDI: Trade Statistics. Merchandise trade as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all in current U.S. dollars.; ; World Trade Organization, and World Bank GDP estimates.; Weighted average;

This page displays a table with Canada Exports By Country in U.S. dollars, according to the United Nations COMTRADE database on international trade.

Venezuela VE: Goods Trade: % of GDP data was reported at 24.439 % in 2014. This records a decrease from the previous number of 37.068 % for 2013. Venezuela VE: Goods Trade: % of GDP data is updated yearly, averaging 42.379 % from Dec 1960 (Median) to 2014, with 55 observations. The data reached an all-time high of 54.803 % in 2005 and a record low of 24.439 % in 2014. Venezuela VE: Goods Trade: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Venezuela – Table VE.World Bank.WDI: Trade Statistics. Merchandise trade as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all in current U.S. dollars.; ; World Trade Organization, and World Bank GDP estimates.; Weighted average;

Japan JP: Goods Trade: % of GDP data was reported at 28.120 % in 2017. This records an increase from the previous number of 25.307 % for 2016. Japan JP: Goods Trade: % of GDP data is updated yearly, averaging 18.298 % from Dec 1960 (Median) to 2017, with 58 observations. The data reached an all-time high of 30.975 % in 2014 and a record low of 13.557 % in 1993. Japan JP: Goods Trade: % of GDP data remains active status in CEIC and is reported by World Bank. The data is categorized under Global Database’s Japan – Table JP.World Bank: Trade Statistics. Merchandise trade as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all in current U.S. dollars.; ; World Trade Organization, and World Bank GDP estimates.; Weighted average;