19.1 Foreign Exchange Markets and Currency Exchange Rates
The foreign exchange (FX) market is by far the world’s largest financial market, with daily trading volumes of more than $4 trillion. Trading in this market is dominated by a few key currencies, including the U.S. dollar, the British pound sterling, the Japanese yen, and the euro. The FX market is an over-the-counter market with participants (buyers and sellers) located in major commercial and investment banks around the world. Figure 19.1 lists the top 10 currencies traded in the FX market and their shares of total trading volume.
Figure 19.1
Most Traded Currencies in the Foreign Exchange Market
| Currency | Percentage Shares of Average Daily Volume |
|---|---|
| a The total is 200% because trading ... | |
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