Foreign Exchange Market size to increase by USD 516.48 billion between 2023 to 2028| Increasing market liquidity to drive the market growth – Technavio

NEW YORK , Dec. 6, 2023 /PRNewswire/ — In a recent Technavio report titled Foreign Exchange Market is projected to grow at a rapid pace in the coming years. The market size is projected to grow by USD 516.48 billion, accelerating at a CAGR of 10.31% from 2023 to 2028. It is revealed that, Europe is estimated to contribute 43% to the growth of the global market. Download the sample report here

The market’s growth is significantly influenced by increased liquidity, which is particularly notable in the global foreign exchange market, known for its ease of trading multiple currencies worldwide. The swift access to news and pricing empowers foreign exchange traders with current information, boosting market expansion during the forecast period.

In North America, foreign exchange trading activity surged by 3.6% from October 2020 to October 2021, attributed to ongoing trade monitoring and surveillance in the market. Tightening regulatory scrutiny of leading companies was necessitated following recent collusive activities and benchmark manipulations in currency markets, prompting more transparent trading activity records. Sell-side dealers are expected to play a significant role ahead, potentially enhancing audit standards and facilitating better communication among traders. Furthermore, periods of low volatility often lead to consistent earnings in stable currencies considered safe havens, while speculative counterparts may experience substantial gains.

Technavio highlights the emerging trends of Foreign Exchange Market:

Market transparency significantly shapes market growth, providing clarity on traded assets, prices, participants, and global currency movements.The global foreign exchange market offers full access to comprehensive market data, enabling real-time portfolio monitoring across multiple nations and time zones.Absence of government or central bank control prevents market cornering or prolonged price fixing, although short-term advantages due to information lag exist but are unsustainable.The market’s immense size contributes to fairness and efficiency, fostering market expansion in the forecast period.

The market is segmented by Type (Reporting Dealers, Other Financial Institutions, and Non-financial Customers),  Trade Finance Instruments (Currency Swaps, Outright Forward And FX Swaps, and FX Options), Geography (North America, Europe, APAC, South America, Middle East And Africa)

The reporting dealers segment is expected to experience considerable growth during the forecast period. Participants in the foreign exchange market carry risky inventory positions as they reach maturity. In situations where liquidity is lacking, those suppliers who absorb market imbalances receive high returns as compensation. These returns mirror the risk premium linked to non-diversifiable risks.

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Companies like Standard Chartered PLC, Bank of America Corp., and JPMorgan Chase and Co. are major players in the Foreign Exchange Market.

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According to Technavio’s analysis, The Foreign Exchange Market Analysis Report from 2024 to 2028 highlights significant market trends, such as increasing liquidity and transparency in trading. It identifies challenges like counterparty risks due to market regulations and outlines the dominance of reporting dealers in driving market growth. Regional insights emphasize Europe’s substantial contribution and North America’s resilience amid rising trading activity. Overall, the report provides comprehensive insights into key drivers, emerging trends, and regional market dynamics impacting the global foreign exchange landscape.

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TOC

Executive SummaryMarket LandscapeMarket SizingHistoric Market SizeFive Forces AnalysisMarket Segmentation by TypeMarket Segmentation by Trade Finance InstrumentsCustomer LandscapeGeographic LandscapeDrivers, Challenges, and TrendsCompany LandscapeCompany AnalysisAppendix

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SOURCE Technavio