Currency trading gets discussed as a single market. In practice it’s a set of markets with very different characteristics, and the difference between them shows up directly in execution costs.
A trader working the most heavily traded pair operates in conditions almost nothing else in finance can match: enormous depth, narrow spreads, near-continuous pricing. A trader working a thin cross deals with wider spreads, thinner books and more slippage on the same size. Same asset class, different economics.
Knowing where the volume sits is therefore practical information rather than trivia.
Reading a currency pair
Every quote involves two currencies. One is being bought, the other sold, and the price expresses how much of the second is needed to buy one unit of the first.
That structure produces a feature worth internalising when learning what is forex trading at a working level: there is no way to hold a view on one currency alone. A position on a stronger dollar is always a position against something specific, and the choice of what to hold it against is a separate decision with its own risks.
Two traders can share an identical view on one currency and get opposite results, purely because they expressed it against different counterparts.
Where the volume actually sits
Concentration in this market is extreme, and the distribution is public.
Analysis of the Bank for International Settlements survey shows the euro-dollar pair alone accounting for roughly 21% of global forex volume at around $2.03 trillion daily, with USD/JPY volume up 35% since 2022 and USD/CNY up 59%.
Those growth figures are more useful than the rankings. A pair whose volume has risen by half in three years is a pair whose liquidity conditions, participant mix and typical spread have changed materially over that period. A strategy calibrated on older conditions may be operating on assumptions that have quietly moved.
The dollar’s structural position
Underneath the pair-level detail sits one dominant fact. The BIS survey found the US dollar on one side of 89% of all FX trades, with the euro second at 28.9% and the yen at 16.8%, out of total daily turnover of $9.6 trillion.
Because every trade involves two currencies, those shares total 200% rather than 100%. The practical reading is that the dollar is present in nearly nine trades out of ten.
For a trader, that has a specific consequence. Most positions carry dollar exposure whether or not the trader intended it. Someone holding several pairs may believe they have diversified across currencies while actually holding one concentrated view on the dollar, expressed several ways.
The survey also found trading concentrated geographically, with sales desks in the UK, US, Singapore and Hong Kong handling 75% of global activity.
What concentration means for execution
The geographic concentration explains a pattern most active traders notice before they can explain it:
- Spreads tighten when the major trading centres are open and overlap
- Depth thins in the gaps between sessions, particularly after the US close and before Asia opens fully
- Economic releases land during specific sessions, which is when volume and volatility cluster
- Weekend gaps appear because the market’s participants, not the market itself, take the weekend off
None of this changes what a trade costs on paper. It changes what a trade costs in practice, and the difference between those two numbers is where a lot of strategy performance quietly goes.
Choosing which pairs to trade
A workable approach for someone deciding where to focus:
- Start with the most liquid pairs, where execution conditions are most consistent
- Check the dollar exposure across all open positions, to see whether the portfolio holds one view or several
- Match the pair to the session, trading each pair when its home markets are active
- Note the volume trend, since a pair growing quickly is one where conditions are shifting
- Track actual execution costs, not quoted spreads, over a meaningful sample of trades
The last point tends to be the most informative. Quoted spreads describe good conditions. Recorded execution across a hundred trades describes the conditions a strategy actually operates in.
The useful takeaway
Scale is the headline, but structure is what a trader can act on. The market moves $9.6 trillion a day, and that flow is unevenly distributed across pairs, across sessions and across a single dominant currency.
A trader who knows which pairs carry the deepest books, when those books are deepest, and how much of their portfolio is really one dollar position, is working with the structure rather than around it. Whether that produces better decisions depends on everything else in the process, but it removes a category of avoidable cost, which is a reasonable place to start.
