ABSTRACT
In the international foreign exchange market, the US dollar is the dominating currency, the euro, newly established in 1999, coming in second place. Of the total transactions in the international currency markets, 89 percent have the US dollar on one side of the transaction, 37 percent the euro. The yen and the sterling follow with 20 and 17 percent, respectively. The daily average turnover on the foreign exchange market amounts to US$1.9 trillion (April 2004). This figure is adjusted for double counting; the gross turnover is US$2.7 trillion. Spot market transactions account for US$620 billion, outright forwards for US$208 billion, foreign exchange swaps for US$944 billion. The average daily turnover in the over-the-counter derivatives market is US$2.4 trillion. The by far most traded currency pair in 2004 was the dollar/euro – amounting to 28 percent of global turnover; the dollar/yen accounted for 17 percent and the dollar/sterling for 14 percent (Bank for International Settlements, March 2005). Thirty-one percent of total turnover is done in the UK; this means that London has retained
its historical position. The next in the rankings are the US with 19 percent, Japan with 8, Singapore with 5, Germany with 5, and Hong Kong with 4 percent.
