Europe Forex Trading Market Size

Written by Matthew Levy, CFA

Matthew Levy, CFA

Matthew Levy, CFA, is an experienced financial writer and content specialist with a strong background in financial services, economics, and investment analysis.

, | Updated: April 6, 2026

Europe, with 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 by 20 of the European Union’s 27 member states, the euro 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. Cities like London, Frankfurt, Zurich, and Paris play a major 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 commanding 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 hub, 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 done by multiple national regulators, such as:

• The UK’s Financial Conduct Authority (FCA)
• Switzerland’s Financial Market Supervisory Authority (FINMA)
• The Cyprus Securities and Exchange Commission (CySEC)
• Malta’s Financial Services Authority (MFSA)
• Germany’s Federal Financial Supervisory Authority (BaFin)
• France’s Autorité des Marchés Financiers (AMF)
• Spain’s Comisión Nacional del Mercado de Valores (CNMV)
• The Netherlands’ Autoriteit Financiële Markten (AFM)
• Denmark’s Financial Supervisory Authority (DFSA, Finanstilsynet)

This list is not exhaustive, as many other European supervisory bodies oversee their respective financial markets. 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 is known for its liquidity when it comes to forex trading, with the London (European) trading session accounting for around 38% of the daily forex turnover according to the Bank for International Settlements’ Triennial Central Bank Survey 2025. 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

The European Central Bank’s Euro Money Market Study 2024 provided a comprehensive analysis of euro money markets based on data from the 45 largest euro area banks. According to its findings, daily turnover in the European market rose from €1.3 trillion at the end of 2022 to €1.8 trillion at the end of 2024, marking a 38% growth.

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

Growth was uneven: Secured transactions grew 41%, and unsecured trades rose 28%. In contrast, short-term securities (STS) declined 32%, and foreign exchange (FX) swaps fell 12%. Overnight index swaps (OIS) recorded the strongest growth at 101%, driven by expectations of interest rate changes. The decline in STS and FX swap volumes signaled a shift toward slightly longer maturities, as outstanding amounts remained largely unchanged. Secured trades, meanwhile, continued to dominate the euro money market, accounting for over half of total turnover.

Rapid urbanization, the increasing adoption of digital financial technologies, and rising disposable incomes are key factors contributing to market expansion. In addition, the introduction of new instruments like outright forwards and currency options has broadened the range of trading and hedging strategies available to market participants.

Growth Rate (2022-2024)

Source: www.ecb.europa.eu

The next Euro Money Market Study is scheduled for the second quarter of 2027 and will feature an expanded analytical scope, including trade data from 69 banks, up from 45 banks in the current edition.

Aggregate Daily Turnover Overview

Europe’s forex market size growth, as detailed in the section above, is characterized by 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 presents data sourced from the Bank of England’s Foreign Exchange Joint Standing Committee (FXJSC), showing UK foreign exchange market turnover by instrument between October 2023 and April 2025.

*Reported UK foreign exchange market turnover by instrument.

*Totals may not sum due to rounding.

*Daily averages in billions of US dollars.

Source: Turnover Survey for Apr-2024 and Oct-2023, Turnover Survey for Apr-2025

The UK’s average daily turnover climbed to a record $4,045 billion, a 26% increase from October 2024 and 20% higher than April 2024. This marked the biggest survey-on-survey jump since 2013. Elevated market volatility stemming from global trade policy uncertainty was the key factor that contributed to this sharp rise.

Growth was broad-based across instruments, with spot trading up 42% to $1,293 billion, FX swaps rising 11% to $1,563 billion (remaining the largest segment), and FX options surging 52% to $350 billion.

The ranking of top currency pairs was largely unchanged: EUR/USD remained the most actively traded pair in London, averaging $1,010 billion per day and accounting for 25% of total turnover in April 2025.

Daily Turnover by Country

The Triennial Central Bank Survey provides the most comprehensive global data on foreign exchange and OTC derivatives markets. The latest edition, the 14th Triennial Survey, was released on April 1, 2025, with preliminary results published on September 30, 2025.

The table below, sourced from the BIS Data Portal, shows the turnover of OTC foreign exchange instruments by country for the two most recent survey rounds, 2025 and 2022, underscoring the UK’s position as the world’s leading FX trading hub. Note that the table does not include all participating jurisdictions; the full dataset is available on the BIS Data Portal.

Source: www.data.bis.org

*Daily averages in billions of US dollars.

Europe Forex Trading Demographics

Retail forex trading in Europe is characterized by mainly male, relatively young, and increasingly digital-savvy individuals. According to the ESMA’s 2024 Market Report on the Costs and Performance of EU Retail Investment Products, 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 a secondary education and a mid-to-high disposable income.

According to a ranking by VT Markets, a global multi-asset CFD broker, published in December 2023, several European countries make up the list of the “Top 10 Countries with the Most Forex Traders.” From this ranking, we have considered only the European countries, including the UK, Switzerland, France, and Germany.  Notably, the results align with the BIS Survey data shown above, as the same countries consistently appear among the largest contributors to global FX turnover.

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 regulatory framework, designed for investor protection, transparency, and market integrity. There are several regulatory bodies from each country that oversee trading activity in Europe. Below, you will find 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 a tier-1 regulator that supervises the UK’s financial markets, including forex trading. 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. The Federal Financial Supervisory Authority (BaFin) – Germany: The Federal Financial Supervisory Authority (BaFin) regulates financial markets in Germany, including forex trading activities. The watchdog 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. For example, the regulator recently issued a €1.65 million fine on Barclays due to failure to submit voting rights notifications.
3. The Swiss Financial Market Supervisory Authority (FINMA) – Switzerland: The Swiss Financial Market Supervisory Authority (FINMA) is the independent regulator overseeing financial markets in Switzerland. It enforces regulations on banks, securities dealers, asset managers, and insurers, ensuring compliance with anti-money laundering rules and strong investor protection standards. FINMA provides a high level of supervision and enforcement through rigorous licensing, ongoing monitoring, and corrective measures when institutions breach regulations.
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 II, including leverage limits, mandatory negative balance protection, client fund segregation, and a ban on misleading promotions.
5. 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, including the provision of negative balance protection, client fund segregations, and adherence to KYC requirements.
6. 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 European forex trading, 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 data below is sourced from the European Central Bank (ECB) studies on non-cash payments in the first half of 2024 and 2025. Non-cash payments in the еuro area rose by 7.7% in the first half of 2025 compared to the same period in 2024, reaching 77.7 billion transactions. The total value of these payments increased by 2.9% to €116.0 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%. The figures remained relatively unchanged in 2025, with the exceptions being card payments, whose usage rose to 57%, and direct debits, which saw a decline of 1%.

Contactless cards have increased in popularity thanks to their speed and convenience: Their usage rose by 12.8% to 29.6 billion in the first half of 2025. E-wallets and app-based transfers are also on the rise. The average transaction value remained small – €38 per card transaction.

As of the first half of 2025, approximately 55.7 billion transactions were processed by retail payment systems, totaling €26.2 trillion.

The figures for the number of payment services (card payments, credit transfers, direct debits, and e-money payments) are exact and official only for 2024 H1 and 2025 H1, as gathered from the ECB’s updated reporting regime. The years are represented in two distinct ways: standard annual format (2003-2021) and half-year segments (2022 H1, 2022 H2, etc.).

Source: www.ecb.europa.eu (2024), www.ecb.europa.eu (2025)

The Euro, Compared to Other Currencies

The BIS Triennial Central Bank Survey 2025 shows that globally, the EUR ranks second in terms of foreign exchange turnover. Its recorded turnover stands at $2.7 trillion, representing 28.9% of the total $9.6 trillion.

Foreign exchange swaps were the most popular trading instrument type in European markets as they accounted for 43% ($1.7 trillion) of transactions across the continent. FX options, on the other hand, were the least traded market ($233.047 billion).

In comparison, the USD’s own turnover hit $8.5 trillion, or 89.2% of the total turnover, placing it first. The JPY, meanwhile, ranked just below the EUR with its figure reaching $1.6 trillion.

The following table outlines each currency’s performance along with a breakdown of its turnover across instruments.

*Daily averages in billions of USD

Source: BIS

The EUR also tends to see a lot of activity across the local markets of other jurisdiction. In Japan, for example, the EUR was the third most traded currency according to the Tokyo Foreign Exchange Market Committee’s Turnover Survey (October 2025). Based on the data, the euro’s turnover reached $68.94 billion in October 2025.

The USD led with an average daily transaction volume of $362.25 billion, followed by the JPY at $320.75 billion. The Australian dollar (AUD) and British pound (GBP) also showed notable activity but fell below the EUR, recording daily volumes of $30.76 billion and $24.32 billion, respectively.

FX swaps accounted for the largest share of turnover for all five currencies. Spot trading remained strong for USD and JPY, while the EUR had lower activity across all categories.

*Daily averages in billions of USD

Source: www.fxcomtky.com

Allocated Forex Reserves by Currencies

As of the fourth quarter of 2025, 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 20.25% of all allocated reserves, second only to the US dollar, which still leads with a share of 56.77%. 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 chart below provides a breakdown of all shares, valid for the fourth quarter of 2025, 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.

Overall, sectoral composition plays a key role 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 USD/EUR remains the most traded euro currency pair by a wide margin, accounting for 21.2% of global forex volume, as per data from the 2025 BIS Survey. 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 USD/EUR, 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 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 have shown the most popular EUR-based currency pairs globally.

Sources: BIS Survey 2025

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. The share of this jurisdiction remains largely unchanged, as per the current 2025 edition of the 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, usually 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 market 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, independent organizations conduct comprehensive evaluations and award brokers based on performance, reliability, fees, and user experience. The following shortlist ranks the forex brokers with the highest monthly trading volumes in Europe for 2025. Please note that not all forex brokers disclose data on their monthly trading volume, and the information below is sourced from the latest data available on the brokers’ websites.

Written by M. Levy, CFA