The daily transaction in the foreign exchange market UK is quite high. In 2001, the daily turnover was $353 billion in the forward market and $151 billion in the spot market.
The foreign exchange business in the country has shown a steady growth. The UK foreign exchange market is dependent on the Bank of England. The Bank of England, on behalf of the HM Treasury, controls and manages the Exchange Equalization Account. This account holds the country’s foreign exchange and gold reserves.
Almost one third of the currency trading transactions of the world take place in the United Kingdom. According to 2006 statistics, the foreign exchange market in UK registered an amount of $1.1 trillion as business transactions. What is heartening to note is that, the growth rate of FOREX trading in the country has been a whopping 41% than the previous year. This percentage increase is the best in the world because the world average growth percentage of RFX trading has been 38% over the same time.
The United Kingdom, to be more specific, London, is the largest market for foreign exchange trading across the world. The market share of UK in this trade is twice that of its immediate competitor, USA. The most dominant currency traded in the foreign exchange market of UK is the US dollar. Euro is the next most widely traded currency in UK foreign exchange market. Before the advent of the Euro, the Deutsche Mark was the second most important. The most intensely traded currency pair is the Dollar/Euro. The sterling/dollar currency pair is also very important. With the advent of the Euro, both intra-legacy currency swap and intra-legacy currency trading have receded into oblivion.
The foreign exchange market UK is very concentrated. Moreover, it is a well-known fact that the foreign exchange market is a highly volatile market. In order to counter the currency fluctuations, there are a lot of companies in the United Kingdom, which provide excellent foreign exchange dealing services both to companies and individuals. These companies provide the best currency rates and also protect against fluctuations in currency. Moreover, the online currency exchange facilities can also be availed of because they lead to transparency and efficiency.