ABSTRACT
Collectively the foreign exchange markets constitute the largest markets in the world by turnover value. Daily global turnover in all currencies has been estimated at $1.3 trillion. Typical wholesale deals are for amounts of $lm to $10m though transactions can be much larger. The foreign exchange markets have no single location. They comprise hundreds of foreign exchange dealers throughout the world trading through brokers, telephone lines, conversational electronic dealing systems and automated dealing systems. Apart from official holidays and weekends it is possible, with the aid of modern technology, for a dealing room to trade actively around the clock. In practice, liquidity for trading is affected by time overlaps in the three main regional zones of the world. London opens before the Far East markets close and is operational at the same time as other European centers. There is usually substantial liquidity in the London market throughout the day for the major traded currencies. Activity increases as New York opens for business and the market in New York is active until London and the other European centers close. Trading by American west coast banks will overlap with Tokyo and the other Far East centers before the market comes full circle back to Europe when the Far East closes.
