Foreign Currency Dealing For Private Investors

1. Introduction The foreign exchange market owes its existence to the 1971 abandonment of the Bretton Woods accord and the subsequent unwinding of the regime of universal fixed exchange rates. According to the 2001 triennial survey by the Bank of International Settlements (BIS), global foreign exchange turnover amounts to more than $1,200bn per day, over 50% of which is transacted on the London market alone. Global turnover, however, is markedly down on the 1978 BIS survey figure of $1,490bn. The BIS attributes this to the launch of the euro, banking mergers, the growth of electronic broking at the expense of voice and telephone dealing (leading to fewer transactions) and non-banking consolidations that have reduced the need for foreign exchange.