Europe Forex Trading Market Size

Written by Naylyan Nazifova

Naylyan Nazifova

Naylyan Nazifova is a recognised expert in the online trading field. She has many publications and analysis covering forex trading, stock investing and personal finance. 

, | Updated: July 1, 2025

Europe, renowned for its rich cultural and economic heritage, has played a foundational role in shaping modern financial systems. Today, the Old Continent remains a significant force in the Foreign Exchange market, with the euro (EUR) at its center. Adopted as the official currency of 20 of the 27 member states of the European Union, it is the world’s second most traded currency after the US dollar. The launch of the euro in 1999 marked a bold move toward regional monetary integration, unifying diverse national economies under a single currency and giving rise to the eurozone, a monetary union with significant global influence.

Europe’s Role in Forex Trading

Europe is home to a few of the biggest forex trading hubs nowadays. Cities like London, Frankfurt, Zurich, and Paris play a pivotal role in global currency markets, handling a significant share of daily trading volume:

• London stands as the biggest Forex center globally. Even after Brexit, the UK capital continues to dominate institutional and retail forex activity, as well as command a significant share of global daily trading volume, thanks to its long-standing financial infrastructure, legal clarity, and time-zone advantage.
• Frankfurt operates as the seat of the European Central Bank (ECB) and serves as a strategic anchor for eurozone monetary policy decisions.
• Zurich brings Swiss precision and neutrality to the financial sphere, while Paris rounds out the roster with a strong historical role in both public and private finance.

The European Forex market is defined not only by its size and liquidity, but also by its regulatory depth. Oversight is taken over by multiple national regulators, such as:

• The UK’s Financial Conduct Authority (FCA)
• The Cyprus Securities and Exchange Commission (CySEC)
• Germany’s Federal Financial Supervisory Authority (BaFin)
• France’s Autorité des Marchés Financiers (AMF)
• Switzerland’s Financial Market Supervisory Authority (FINMA)

To ensure consistency and investor protection across borders, these entities operate under the broader guidance of the European Securities and Markets Authority (ESMA), which sets regulatory standards and facilitates cross-border collaboration.

The continent’s long-standing banking tradition, coupled with its centralized monetary policy and robust legal structures, makes Europe not only one of the most liquid regions for forex trading but also one of the most secure. With its blend of old-world financial heritage and modern regulatory systems, Europe continues to serve as both a stabilizer and innovator in the ever-evolving global forex market. In the sections that follow, we will explore Europe’s Forex market size, its dynamic trading hubs, the most popular transaction types, the most traded euro currency pairs, and the evolving regulatory framework that shapes how forex trading is conducted across the continent.

Europe’s Forex Market Size

As detailed in the European Central Bank’s ‘Euro Money Market Study 2024’, the European market saw a significant increase in daily turnover, from €1.3 trillion at the end of 2022 to 1.8 trillion at the end of 2024, representing a 38% rise.

Rapid urbanization, the increasing adoption of digital financial technologies, and rising disposable incomes are key factors contributing to the market expansion. In addition, the introduction of new instruments such as outright forwards and currency options has broadened the range of trading and hedging strategies available to market participants. These developments reflect the market’s growing maturity and adaptability, positioning Europe as a vital player in the evolving global forex landscape.

The study examines five key segments of the euro money markets, including secured transactions, unsecured transactions, short-term securities, FX swaps, and overnight index swaps. The developments in said segments have been sourced from money market trades reported to the ECB.

Growth Rate (2022-2024)

Source: www.ecb.europa.eu

Aggregate Daily Turnover Overview

Europe’s Forex market size growth, as detailed in the section above, reflects more active participation and stronger demand across different types of short-term financial trades. The largest share came from secured transactions, such as repurchase agreements, which made up over half of the total volume.

Unsecured lending between banks also increased, while trading in overnight index swaps more than doubled, driven by changes in expectations around interest rates. Although some areas like short-term securities and foreign exchange swaps saw declines, the overall rise in turnover shows how the market is adjusting to changing financial conditions and continues to play a key role in supporting day-to-day funding and stability in the euro area.

Building on the dynamic growth observed in Europe’s Forex market, the United Kingdom emerges as the continent’s foremost forex center. The table below indicates information sourced from the Bank of England’s reported UK foreign exchange market turnover by instrument.

*Reported UK foreign exchange market turnover by instrument

*Daily averages in billions of US dollars, calculated based on 21 working days in April 2024 and 22 working days in October 2023.

Source: www.bankofengland.co.uk

Daily turnover by country

The Bank for International Settlements (BIS) data on derivatives markets for the year 2022 provides information on the turnover of OTC foreign exchange instruments by country, with the UK occupying a leading position:

Source: www.data.bis.org

Europe Forex Trading Demographics

Retail Forex trading in Europe is characterised by mainly male, relatively young, and increasingly digital-savvy individuals. According to ESMA’s Market Report on Costs and Performance of EU Retail Investment Products 2024, digital trading platforms and speculative instruments are key attractors for this demographic.

A growing proportion of investors tend to engage in high-risk activities, influenced by social media and low-cost access. Most traders have at least secondary education, as well as mid-to-high disposable incomes.

According to a ranking by VT Markets, conducted in December 2023, several European countries make up the list of the ‘Top 10 Countries with the Most Forex Traders’. These include the UK, Switzerland, France, and Germany.

European Countries with the Most Forex Traders

Sources: www.blog.vtmarkets.com

Regulatory Authorities in Europe

The Forex trading market in Europe is governed by a strict and well-structured regulatory framework, designed to ensure investor protection, transparency, and market integrity. There are several regulatory bodies from each country that oversee trading activity in Europe. We will provide you with a list of the biggest regulators in Europe, including authorities from countries such as the UK, Cyprus, Germany, and France.

1. Financial Conduct Authority (FCA) – United Kingdom

   The FCA is one of the most respected financial regulators in the world and supervises financial markets, including Forex trading in the UK. It enforces strict regulations on Forex brokers, including capital requirements, client fund segregation, transparent pricing, and strict advertising rules. Even post-Brexit, the FCA continues to have significant influence due to the UK’s large Forex trading market.

2. Cyprus Securities and Exchange Commission (CySEC)

   CySEC is the regulatory authority for financial services in Cyprus and a major Forex regulatory body within the European Union. Many Forex brokers choose Cyprus as their primary legal and operational location because of CySEC’s membership in the European MiFID (Markets in Financial Instruments Directive) framework, which allows brokers regulated by CySEC to operate across the EU under a “passporting” system. CySEC enforces compliance with MiFID regulations, ensuring transparency, investor protection, and fair trading practices.

3. The Federal Financial Supervisory Authority (BaFin) – Germany

   The Federal Financial Supervisory Authority (BaFin) regulates financial markets in Germany, including Forex trading activities. BaFin emphasizes the protection of investors and ensures that Forex brokers operating in Germany meet stringent financial and operational standards. BaFin is known for rigorous supervision and enforcement.

4. Autorité des Marchés Financiers (AMF) – France

   The AMF is France’s independent financial markets regulator, overseeing investment firms, forex brokers, asset managers, and trading platforms. It enforces strict regulations in line with EU directives such as MiFID IIESMA, including leverage limits, mandatory negative balance protection, client fund segregation, and a ban on misleading promotions. The AMF is recognized for its robust supervision and strong focus on investor protection, ensuring transparency, fairness, and safety for traders in France and across the EU.

5. European Securities and Markets Authority (ESMA)

   As mentioned above, ESMA is an independent EU authority established to enhance investor protection and promote stable and orderly financial markets across the European Union. While ESMA does not directly regulate Forex brokers, it plays a pivotal role in harmonizing regulations across member states and setting standards for financial markets, including Forex trading. ESMA is particularly known for implementing leverage caps, standardized disclosure requirements, and measures to limit risks associated with retail Forex trading.

Most Popular Transaction Types

In the European Forex trading environment, efficient and accessible payment methods are essential, especially for retail traders. While institutional Forex flow typically uses credit transfers and direct settlements, retail platforms include a broader range of payment options for investors.

The statistical data below is sourced from the European Central Bank (ECB) study on non-cash payments in the first half of 2024. Non-cash payments in the еuro area rose by 7,4% in the first half of 2024, reaching 72.1 billion transactions, compared to the same period in 2023. The total value of these payments increased by 1.9% to €113,5 trillion. In the first half of 2024, card payments made up 56% of all non-cash transactions in the euro area, followed by credit transfers at 22%, direct debits at 15%, and e-money payments at 6%.

Those trends reflect the preferred transaction methods used by individual Forex traders for deposits and withdrawals. Contactless cards have increased in popularity thanks to their speed and convenience (their usage rose by 13.2% to 25.8 billion in the first half of 2023). E-wallets and app-based transfers are also on the rise. The average transaction value remained small – €39 per card transaction.

As of the first half of 2024, approximately 52.1 billion transactions were processed by retail payment systems, totaling €25.1 trillion.

The table below presents approximate figures for the number of transactions in Europe (in billions) covering the period from 2003 to the first half of 2024.

Source: www.ecb.europa.eu

The Euro, Compared to Other Currencies

According to the Tokyo Foreign Exchange Market Committee’s January 2025 survey, which reflects trading activity from October 2024, the US dollar, euro, and Japanese yen remained the most actively traded currencies in Tokyo’s FX market.

The USD led with an average daily transaction volume of $333.21 billion, followed by the JPY at $309.70 billion, and the EUR at $53.74 billion. The Australian dollar (AUD) and British pound (GBP) also showed notable activity, recording daily volumes of $30.64 billion and $17.64 billion, respectively.

FX swaps accounted for the largest share of turnover for all five currencies, especially for the USD and JPY. Spot trading remained strong for USD and JPY, while the euro had lower activity across all categories. Despite its smaller volume in Tokyo compared to the USD and JPY, the euro still plays a critical role in global FX markets.

*Daily averages in hundred millions of USD

Source: www.fxcomtky.com

Allocated Forex Reserves by Currencies

As of the fourth quarter of 2024, the composition of global allocated reserves reflects the persistence of traditional currencies, as well as the steady evolution of the international monetary landscape.

The Euro remains a key component with a share of 19.83% of all allocated reserves, second only to the US dollar, which still leads with a share of 57.80%. The Euro and the US dollar are followed by other major currencies, such as the Japanese yen, British pound, Canadian dollar, and Chinese renminbi, which all contribute with smaller but notable portions. The Euro’s substantial share highlights its stable role as a global reserve currency and reflects its importance in international trade and finance. The chart below provides a breakdown of all shares, offering context for the Euro’s position within the global reserve framework.

Source: www.data.imf.org

A Federal Reserve report issued in November 2024 investigates how euro-area monetary policy impacts different nations based on their economic structures. According to its findings, higher ECB interest rates tend to have a more pronounced negative effect on countries with large industrial sectors, such as Germany, compared to those with more service-oriented economies, like Spain.

A one-percentage-point increase in the ECB’s policy rate is estimated to lower euro-area GDP by around 1% over three to four quarters, with industrial output suppressed for up to eight quarters, while service sectors tend to recover more quickly.

These findings underscore the importance of sectoral composition in shaping how monetary policy is transmitted across the euro area. Such asymmetries may also influence broader perceptions of the euro’s resilience, with potential long-term implications for its role as a global reserve currency, as reflected in the chart above.

Most Traded Euro Currency Pairs in the Forex Market

The EUR/USD remains the most traded Euro currency pair by a wide margin, accounting for nearly 28% of global Forex volume. That makes it the most liquid and closely watched pair on the market. Its dominance shows the central role of both the Euro and the US dollar in international trade and finance.

Apart from the EUR/USD, other Euro pairs also make a presence in European Forex activity. EUR/GBP is widely traded due to the close economic ties and historical volatility between the Eurozone and the UK. EUR/JPY is another major pair, influenced by interest rate differentials and global risk sentiment. At the same time, EUR/CHF reflects the strong financial interconnection between the Eurozone and Switzerland, often serving as a regional safe-haven trade.

All these Euro pairs attract a lot of attention from traders due to their liquidity, sensitivity to ECB policies, and their role in European economic trades.

In the table below, we will show the most popular EUR-based currency pairs globally. The volume share data is primarily based on FXSSI (2024) estimates.

Sources: www.fxssi.com

Best Time to Trade Forex in Europe

The best time to trade Forex in Europe is during the London session. It runs from 08:00 to 17:00 local time (07:00-16:00 UTC). London, as the largest Forex trading centre globally, accounts for approximately 38% of the total daily Forex turnover, according to the 2022 BIS report. Market liquidity is at its peak during this session, leading to faster execution and tighter spreads – key advantages for both institutional and retail traders.

The London session overlaps with the late hours of the Asian session and the early hours of the New York session, creating even more trading volume, especially in major pairs such as the EUR/USD, GBP/USD, and EUR/GBP. London also sets the tone for the price trends of the day, with many technical trading setups forming during this period due to higher volatility and frequent market-moving news from the Bank of England and other European institutions.

These factors make the London session the busiest, as well as one of the most strategic periods for European Forex traders.

www.xtb.com

Top Forex Brokers in Europe by Monthly Trading Volume

The European Forex trading landscape is characterized by a diverse range of brokers competing to offer the best trading conditions, platforms, and services to a wide spectrum of traders. Broker reputation and regulatory compliance are paramount, given the stringent oversight by authorities such as the FCA, CySEC, and BaFin.

To help traders navigate this competitive market, independent organizations conduct comprehensive evaluations and award brokers based on performance, reliability, fees, and user experience. The following list highlights some of the top-rated Forex brokers in Europe for 2025, ranked by their monthly trading volume. Please note that not all forex brokers disclose data on their monthly trading volume. Information below is sourced from the latest data available on the brokers’ websites.

Written by N. Nazifova