In 2025, the United Kingdom had by far the largest OTC (over-the-counter) foreign exchange (forex) market, with an average daily turnover of around *** trillion U.S. dollars. Of this, the vast majority was due to various kinds of forex derivatives, with swaps being the most common forex instrument traded. Standard spot transactions, where two currencies are exchanged at an agreed price within two days and without a contract, accounted for roughly *** trillion U.S. dollars of the total average daily turnover.

Forex daily volume was nearly ***** billion U.S. dollars for the USD currency, an amount ***** times higher than for the euro (EUR). The forex - or foreign exchange market - turnover per day is a figure that is not often measured, only once every three years. No figures are available for 2020, for instance. What figures are available, however, indicate that the USD currency far outweighs that of many other currencies all over the world. What is the forex market? The forex market is based on the fluctuations in the value of currency interest rates. For example, the U.S. dollar performs differently against other major currencies. If one can properly predict these fluctuations, they can buy a weaker currency with a stronger one. After the currencies rebalance, the original currency will be worth more in terms of the exchange rate, giving the investor a profit. There are many foreign exchange trading services, including many multinational banks that already work in multiple currencies. Other currency trading functions Countries and central banks typically hold foreign currencies. These international reserves help facilitate the transactions in international trade, which is one reason China’s foreign reserves are so high. Countries can buy and sell foreign currencies to maintain a particular exchange rate. This is necessary for currencies that are pegged to another currency, such as the U.S. dollar. However, some countries are accused of exchange rate manipulation to make their exports seem more attractive. Finally, certain currencies are considered safer. Citizens and firms in a country with an unstable currency will buy these currencies to avoid volatility, or even hyperinflation, in their home currency.

The dataset contains All India Daily Foreign Exchange Market Turnover in Financial Market.

Note: 1. Data relate to purchases and sales of foreign exchange on account of merchant and inter-bank transactions.

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Foreign Exchange Market Size 2025-2029

The foreign exchange market size is valued to increase by USD 582 billion, at a CAGR of 10.6% from 2024 to 2029. Growing urbanization and digitalization will drive the foreign exchange market.

Major Market Trends & Insights

Europe dominated the market and accounted for a 47% growth during the forecast period.
By Type - Reporting dealers segment was valued at USD 278.60 billion in 2023
By Trade Finance Instruments - Currency swaps segment accounted for the largest market revenue share in 2023

Market Size & Forecast

Market Opportunities: USD 118.14 billion
Market Future Opportunities: USD 582.00 billion
CAGR from 2024 to 2029 : 10.6%

Market Summary

The market, a dynamic and intricate web of financial transactions, plays a pivotal role in facilitating global trade and economic interactions. Its primary function is to enable the conversion of one currency into another, thereby mitigating the risk of currency fluctuations for businesses and investors. Key drivers of this market include growing urbanization and digitalization, which have expanded trading opportunities to a 24x7 global economy. However, the uncertainty of future exchange rates poses a significant challenge, necessitating effective risk management strategies. The market's evolution reflects the increasing interconnectedness of the global economy. Transactions occur in a decentralized, over-the-counter system, with major trading centers in London, New York, and Tokyo.
Participants include commercial banks, investment banks, hedge funds, and individual investors, all seeking to capitalize on price differences between currencies. Trends shaping the market include the increasing use of automation and artificial intelligence to analyze market data and execute trades. Regulatory changes, such as the introduction of stricter capital requirements, also impact the market's functioning. Looking ahead, the market is expected to remain a vital component of the global financial landscape, with continued growth driven by increased trade and economic interdependence. However, challenges, such as regulatory changes and geopolitical risks, will necessitate adaptability and innovation from market participants.

What will be the Size of the Foreign Exchange Market during the forecast period?

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How is the Foreign Exchange Market Segmented ?

The foreign exchange 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.

Type

  Reporting dealers
  Financial institutions
  Non-financial customers


Trade Finance Instruments

  Currency swaps
  Outright forward and FX swaps
  FX options


Trading Platforms

  Electronic Trading
  Over-the-Counter (OTC)
  Mobile Trading


Geography

  North America

    US
    Canada


  Europe

    Germany
    Switzerland
    UK


  Middle East and Africa

    UAE


  APAC

    China
    India
    Japan


  South America

    Brazil


  Rest of World (ROW)

By Type Insights

The reporting dealers segment is estimated to witness significant growth during the forecast period.

The market, a dynamic and ever-evolving financial landscape, is characterized by constant activity and intricate patterns. Participants engage in various trading strategies, employing advanced tools such as stop-loss and take-profit orders on forex trading platforms. Real-time data feeds and order book dynamics facilitate trade execution speed, while market microstructure and slippage minimization techniques ensure efficient transactions. Currency correlation analysis and transaction cost analysis are integral to informed decision-making, with backtesting methodologies providing valuable insights. Currency forwards contracts, position sizing techniques, and forex derivatives pricing are essential components of risk management systems. Carry trade strategies, hedging strategies, and interest rate parity are popular tactics employed by market participants.

Algorithmic trading strategies, driven by options pricing models and trading algorithms' efficiency, significantly influence price discovery mechanisms. High-frequency trading and volatility modeling contribute to the market's liquidity risk management, while foreign exchange swaps and currency option valuation help manage risk. The market's complexities necessitate sophisticated risk management systems and intricate order routing optimization. Global payments systems facilitate the smooth transfer of funds, and liquidity risk management remains a critical concern for market participants. According to recent studies, The market is estimated to account for approximately USD6 trillion in daily trading volume, und

Turnover in the euro increased between 2019 and 2022, reflecting a growing share in global trading on foreign exchange markets. By 2022, trades of the euro currency on forex was over **** trillion U.S. dollars on average on a single day, a significant increase on the turnover of *** billion U.S. dollars recorded in 2001. The forex - or foreign exchange market - turnover per day is a figure that is not often measured, only once every three years.

According to Cognitive Market Research, the global Foreign Exchange market size was USD 807548.5 million in 2024. It will expand at a compound annual growth rate (CAGR) of 7.00% from 2024 to 2031.

North America held the major market share for more than 40% of the global revenue with a market size of USD 323019.40 million in 2024 and will grow at a compound annual growth rate (CAGR) of 5.2% from 2024 to 2031.
Europe accounted for a market share of over 30% of the global revenue with a market size of USD 242264.55 million.
Asia Pacific held a market share of around 23% of the global revenue with a market size of USD 185736.16 million in 2024 and will grow at a compound annual growth rate (CAGR) of 9.0% from 2024 to 2031.
Latin America had a market share of more than 5% of the global revenue with a market size of USD 40377.43 million in 2024 and will grow at a compound annual growth rate (CAGR) of 6.4% from 2024 to 2031.
Middle East and Africa had a market share of around 2% of the global revenue and was estimated at a market size of USD 16150.97 million in 2024 and will grow at a compound annual growth rate (CAGR) of 6.7% from 2024 to 2031.
Forex Options are the fastest-growing segment in the Foreign Exchange market by type, driven by their flexibility for hedging and speculative trading

Market Dynamics

Key Drivers

The interplay of currency supply and demand dictates forex market movements.

The interplay of currency supply and demand fundamentally dictates movements in the foreign exchange market, a colossal marketplace with an average daily trading volume of approximately $2.44 trillion as of January 2025. This dynamic is powerfully influenced by central bank monetary policy, as demonstrated by the direct impact of interest rate changes. When a central bank raises interest rates, it increases the demand for its currency from foreign investors seeking higher returns on their assets. A mere 25 basis point increase in interest rates can trigger capital inflows sufficient to appreciate a currency by 1-2% against other currencies. This demand is further influenced by a country's economic health, as a strong economy, like the U.S.'s projected 1.4% GDP growth in 2025, attracts significant foreign investment, thereby increasing the demand for its currency. The balance of a country's trade also directly impacts currency flows; a nation with a trade surplus sees a continuous demand for its currency as foreigners buy its exports, while a trade deficit increases supply as local buyers sell their currency for imports. Ultimately, every economic data point and policy decision contribute to the daily flux of supply and demand, creating the volatile and dynamic market movements that drive trillions of dollars in trading volume across the globe.

Source -

https://www.tradeweb.com/newsroom/media-center/news-releases/tradeweb-reports-january-2025-total-trading-volume-of-$54.6-trillion-and-average-daily-volume-of-$2.44-trillion

https://www.bea.gov/news/2025/gross-domestic-product-1st-quarter-2025-advance-estimate

Key Restraints

The foreign exchange market's expansion is limited by its transparency and counterparty risk challenges.

The foreign exchange market's expansion is significantly limited by a lack of transparency and pervasive counterparty risk, both of which are direct consequences of its decentralized, Over-the-Counter (OTC) structure. According to the Bank for International Settlements (BIS) Triennial Survey, a staggering 80% of all forex turnover happens in this OTC environment, including 28% of spot trades and 51% of swaps. This structural opaqueness leads to fragmented pricing and makes it difficult for participants to assess true market depth, thereby eroding confidence. This setup also exposes participants to significant counterparty risk, as there is no central clearinghouse to guarantee trades. This risk is underscored by recent regulatory actions, with French authorities adding 50 new websites to their blacklist of unauthorized platforms in the first half of 2024, and the Reserve Bank of India (RBI) maintaining its own alert list against unregulated brokers. Ultimately, these quantifiable risks pose a fundamental restraint on market expansion by increasing trading costs, undermining trust, and deterring both institutional and retail participants.

Source –

https://www.bis.org/statistics/rpfx22_fx.html

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China Foreign Exchange Turnover: RMB/FX Forward: 1 Day data was reported at 24,197.970 RMB mn in Apr 2025. This records a decrease from the previous number of 28,435.860 RMB mn for Mar 2025. China Foreign Exchange Turnover: RMB/FX Forward: 1 Day data is updated monthly, averaging 7,201.835 RMB mn from Jan 2017 (Median) to Apr 2025, with 100 observations. The data reached an all-time high of 57,526.700 RMB mn in Dec 2017 and a record low of 962.990 RMB mn in Dec 2018. China Foreign Exchange Turnover: RMB/FX Forward: 1 Day data remains active status in CEIC and is reported by China Foreign Exchange Trading Center. The data is categorized under China Premium Database’s Money Market, Interest Rate, Yield and Exchange Rate – Table CN.MD: China Foreign Exchange Trading Center (CFETC): Foreign Exchange Trading.

The average daily turnover of foreign exchange (forex) transactions and derivatives traded in the Netherlands has fluctuated greatly between 2001 and 2019. From a peak of ***** billion U.S. dollars in 2013, by 2019 this had fallen to **** billion U.S. dollars. The most commonly traded was foreign exchange rate swaps, which are agreements to swap the principal and interest payments made on one currency for the principal and interest payments on a loan of equal value in another currency. In 2019, swaps accounted for around ** percent of the total daily forex turnover in the Netherlands.

Global foreign exchange (net - net), for fx swaps, total (all currencies), total (all currencies), one day, total (all counterparties), All countries (total), All countries (total), total (all ratings), total (all sectors), total (all methods), turnover - notional amounts (daily average)

The average daily turnover of foreign exchange (forex) transactions and derivatives traded in France grew steadily greatly between 2001 and 2013, before gradually declining in the following years. From a peak of ***** billion U.S. dollars in 2013, by 2019 this had fallen to ***** billion U.S. dollars. The most commonly traded was foreign exchange rate swaps, which are agreements to swap the principal and interest payments made on one currency for the principal and interest payments on a loan of equal value in another currency. In 2022, swaps accounted for around ** percent of the total daily forex turnover in France.

India FX Rate: RBI: Turnover: Merchant: Purchase: FCY/INR: Forward data was reported at 1.149 USD bn in 24 Aug 2018. This records a decrease from the previous number of 1.324 USD bn for 23 Aug 2018. India FX Rate: RBI: Turnover: Merchant: Purchase: FCY/INR: Forward data is updated daily, averaging 757.000 USD mn from Dec 1998 (Median) to 24 Aug 2018, with 4868 observations. The data reached an all-time high of 4.213 USD bn in 10 Aug 2011 and a record low of 0.000 USD mn in 01 Apr 2013. India FX Rate: RBI: Turnover: Merchant: Purchase: FCY/INR: Forward data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under Daily Database’s Foreign Exchange Rates – Table IN.MC007: Foreign Exchange Turnover: Reserve Bank of India. The figures are generally low on the 1 April of every year due to the Annual Financial Closing of Accounts of Commercial and Co-operative Banks

India FX Rate: RBI: Turnover: Interbank: Sale: FCY/INR: Swap data was reported at 5.949 USD bn in 24 Aug 2018. This records a decrease from the previous number of 8.049 USD bn for 23 Aug 2018. India FX Rate: RBI: Turnover: Interbank: Sale: FCY/INR: Swap data is updated daily, averaging 4.762 USD bn from Dec 1998 (Median) to 24 Aug 2018, with 4851 observations. The data reached an all-time high of 16.961 USD bn in 27 Mar 2018 and a record low of 0.000 USD mn in 31 Oct 2016. India FX Rate: RBI: Turnover: Interbank: Sale: FCY/INR: Swap data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under Daily Database’s Foreign Exchange Rates – Table IN.MC007: Foreign Exchange Turnover: Reserve Bank of India. The figures are generally low on the 1 April of every year due to the Annual Financial Closing of Accounts of Commercial and Co-operative Banks

The average daily turnover of foreign exchange (forex) transactions and derivatives traded in Australia climbed from 2001 to 2010, reaching a peak of *** billion U.S. dollars before dropping to around *** billion U.S. dollars in 2019. The most commonly traded was foreign exchange rate swaps, which are agreements to swap the principal and interest payments made on one currency for the principal and interest payments on a loan of equal value in another currency.

India FX Rate: RBI: Turnover: Merchant: Purchase: FCY/INR: Spot data was reported at 3.162 USD bn in 24 Aug 2018. This records a decrease from the previous number of 4.060 USD bn for 23 Aug 2018. India FX Rate: RBI: Turnover: Merchant: Purchase: FCY/INR: Spot data is updated daily, averaging 1.716 USD bn from Dec 1998 (Median) to 24 Aug 2018, with 4872 observations. The data reached an all-time high of 9.378 USD bn in 20 Oct 2010 and a record low of 1.000 USD mn in 12 Nov 2016. India FX Rate: RBI: Turnover: Merchant: Purchase: FCY/INR: Spot data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under Daily Database’s Foreign Exchange Rates – Table IN.MC007: Foreign Exchange Turnover: Reserve Bank of India. The figures are generally low on the 1 April of every year due to the Annual Financial Closing of Accounts of Commercial and Co-operative Banks

India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/INR: Spot data was reported at 11.234 USD bn in 24 Aug 2018. This records a decrease from the previous number of 12.769 USD bn for 23 Aug 2018. India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/INR: Spot data is updated daily, averaging 4.338 USD bn from Dec 1998 (Median) to 24 Aug 2018, with 4870 observations. The data reached an all-time high of 18.423 USD bn in 28 Mar 2018 and a record low of 0.000 USD mn in 01 Apr 2013. India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/INR: Spot data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under Daily Database’s Foreign Exchange Rates – Table IN.MC007: Foreign Exchange Turnover: Reserve Bank of India. The figures are generally low on the 1 April of every year due to the Annual Financial Closing of Accounts of Commercial and Co-operative Banks

The U.S. dollar dominated the list of the most traded currency pairs in 2025, being involved in all the top nine currency pairs. The most common forex transaction in that year was the euro and the U.S. dollar, which accounted for almost ***** percent of the average daily turnover of all currency exchanges in April 2025. This was followed by the U.S. dollar and the Japanese yen, then the U.S. dollar and the British pound. The most common pair excluding the U.S. dollar was the euro and the British pound, which accounted for **** percent.

India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/FCY: Spot data was reported at 4.891 USD bn in 24 Aug 2018. This records a decrease from the previous number of 6.068 USD bn for 23 Aug 2018. India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/FCY: Spot data is updated daily, averaging 2.646 USD bn from Dec 1998 (Median) to 24 Aug 2018, with 4875 observations. The data reached an all-time high of 8.332 USD bn in 19 Sep 2007 and a record low of 0.000 USD mn in 10 Mar 2009. India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/FCY: Spot data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under Daily Database’s Foreign Exchange Rates – Table IN.MC007: Foreign Exchange Turnover: Reserve Bank of India. The figures are generally low on the 1 April of every year due to the Annual Financial Closing of Accounts of Commercial and Co-operative Banks

India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/INR: Swap data was reported at 6.116 USD bn in 24 Aug 2018. This records a decrease from the previous number of 7.462 USD bn for 23 Aug 2018. India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/INR: Swap data is updated daily, averaging 4.649 USD bn from Dec 1998 (Median) to 24 Aug 2018, with 4852 observations. The data reached an all-time high of 19.219 USD bn in 23 Oct 2015 and a record low of 0.000 USD mn in 01 Apr 2013. India FX Rate: RBI: Turnover: Interbank: Purchase: FCY/INR: Swap data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under Daily Database’s Foreign Exchange Rates – Table IN.MC007: Foreign Exchange Turnover: Reserve Bank of India. The figures are generally low on the 1 April of every year due to the Annual Financial Closing of Accounts of Commercial and Co-operative Banks

India FX Rate: RBI: Turnover: Interbank: Sale: FCY/FCY: Spot data was reported at 4.812 USD bn in 24 Aug 2018. This records a decrease from the previous number of 5.868 USD bn for 23 Aug 2018. India FX Rate: RBI: Turnover: Interbank: Sale: FCY/FCY: Spot data is updated daily, averaging 2.636 USD bn from Dec 1998 (Median) to 24 Aug 2018, with 4874 observations. The data reached an all-time high of 9.806 USD bn in 01 Nov 2012 and a record low of 0.000 USD mn in 10 Mar 2009. India FX Rate: RBI: Turnover: Interbank: Sale: FCY/FCY: Spot data remains active status in CEIC and is reported by Reserve Bank of India. The data is categorized under Daily Database’s Foreign Exchange Rates – Table IN.MC007: Foreign Exchange Turnover: Reserve Bank of India. The figures are generally low on the 1 April of every year due to the Annual Financial Closing of Accounts of Commercial and Co-operative Banks

The USD to EUR exchange rate in 2022 will be roughly 30 percent higher than it was in 2012, revealing a very strong dollar against the euro. The value of 0.86 euros per dollar was noticeably higher than the 2016 peak of 0.95 euros per dollar, but still above the price before the Eurozone Crisis. This started in 2009 and was caused by the difficulties of several European countries with repaying government debt.What does the exchange rate mean?At any single point, an exchange rate is simply a measure of the value of one currency in terms of another. However, when the exchange rate shifts, one currency gets 'stronger' and the other 'weaker'. This is particularly important in international trade. A strong currency makes imports cheaper, so one could expect the trade balance of a country with a strong currency to decrease. In such a way, a strong currency would hurt a country with a high trade surplus.Exchange rate investmentsThere is a financial market built around currency fluctuations. The foreign exchange market, or forex market, has a daily turnover of trillions of dollars. This market is critical for international trade, but many investors simply use it to speculate.