8 Largest Forex Trading Centers in the World

By CountingPips.com

Forex market trading is truly a global phenomenon as well as the largest financial market in the world with over $4 trillion changing hands on a daily basis. Looking at the most recent Bank of International Settlements foreign-exchange report, published every three years, we get a clear view of where most of the daily forex trading volume takes place. Many of the usual suspects like the UK and USA are found at the top of the list for the largest fx trading centers while others such as Singapore may be more surprising to many. Below is a list of the 8 largest forex trading centers in the world.

(Data from Bank of International Settlements (BIS) foreign-exchange report as of April 2010, All totals in US dollars)

1. United Kingdom – The UK and its financial center of London participate in the largest percentage of overall global forex daily trading volume of any geographical location. UK daily trading volume increased from 35 percent in 2007 to a total of 37 percent of the world’s overall trading volume in 2010, according to the BIS data. Total daily trading volume rose by just about 25 percent since 2007 when dollar volume equaled $1,483 billion to 2010 when volume stood at $1,854 billion per day. A more recent report has shown daily volume just passed the 2,000 billion mark in April 2011.

Financial Capital: London
Average Daily Trading Volume: $1,854 billion
Percentage of Daily Global Forex Volume: 37 %

2. United States – The United States comes in second in daily trading volume and is the largest country on the list with over 300 million people. The US amounted to a total of 18 percent of the daily global forex volume in 2010 following a 17 percent share of the volume in 2007. The total dollar amount traded increased by approximately 20 percent to $904 billion a day in 2010 from a total of $745 billion in 2007.

Financial Capital: New York City
Average Daily Trading Volume: $904 billion
Percentage of Daily Global Forex Volume: 18 %

3. Japan – Japan is the third-largest forex trading center with a total of 6 percent of global foreign exchange turnover taking place in this country of 128 million people. Japan also amounted to 6 percent of the global turnover in 2007 following an 8 percent share in 2004. Total dollar amount of trading surged by over 20 percent from 250 billion in 2007 to a total of 312 billion in 2010.

Financial Capital: Tokyo
Average Daily Trading Volume: $312 billion
Percentage of Daily Global Forex Volume: 6 %

4. Singapore – Singapore is up next with a total of 5 percent of the world’s daily forex trading volume. This small country of roughly 5 million people averaged $266 billion of total daily volume in 2010. This was an increase from a total of $242 billion in 2007 which accounted for 6 percent of the overall global forex trade.

Financial Capital: Singapore
Average Daily Trading Volume: $266 billion
Percentage of Daily Global Forex Volume: 5 %

5. Switzerland – Switzerland was the fifth-largest forex trading center in 2010 with 5 percent of the total global volume which was small a decrease from 2007 when it accounted for 6 percent of daily volume. This European country of roughly 8 million people is famous for its banking sector and is one of the richest countries in the world on a GDP per capita basis. Total daily volume increased to $263 billion in 2010 from a total of $254 billion in 2007.

Financial Capital: Zurich, Geneva
Average Daily Trading Volume: $263 billion
Percentage of Daily Global Forex Volume: 5 %

6. Hong Kong – Hong Kong follows Switzerland as the sixth largest trading center in 2010 with approximately 5 percent of forex daily trade volume. This is an increase from 4 percent in 2007 for this city-state on the southern coast of China which has an estimated population of 7 million people. Hong Kong’s total daily volume averaged $238 billion in 2010 which was over a 30 percent increase from 2007.

Financial Capital: Hong Kong
Average Daily Trading Volume: $238 billion
Percentage of Daily Global Forex Volume: 5 %

7. Australia – Australia is next on the list with a 4 percent share of total forex daily volume which matches its 2007 volume share. Overall trading volume grew right around 9 percent from a total of $176 billion in 2007 to a total of $192 billion in 2010.

Financial Capital: Sydney
Average Daily Trading Volume: $192 billion
Percentage of Daily Global Forex Volume: 4 %

8. France – Number eight on our list with right around a 3 percent share of the daily forex trading volume is France with its financial center of Paris. France also amounted to 3 percent of the daily global forex trade in 2007 and saw its daily total volume rise by roughly 20 percent from a total of $127 billion in 2007 to a total of $152 billion in 2010.

Financial Capital: Paris
Average Daily Trading Volume: $152 billion
Percentage of Daily Global Forex Volume: 3 %