Speculating in the currency market

While commercial and financial transactions in the currency
markets represent huge nominal sums, they still pale in compar-
ison to amounts based on speculation. By far the vast majority
of currency trading volume is based on speculation — traders
buying and selling for short-term gains based on minute-to-
minute, hour-to-hour, and day-to-day price fluctuations.
Estimates are that upwards of 90 percent of daily trading
volume is derived from speculation (meaning, commercial or
investment-based FX trades account for less than 10 percent
of daily global volume). The depth and breadth of the specula-
tive market means that the liquidity of the overall forex
market is unparalleled among global financial markets.
The bulk of spot currency trading, about 75 percent by
volume, takes place in the so-called “major currencies,” which
represent the world’s largest and most developed economies.
Additionally, activity in the forex market frequently functions
on a regional “currency bloc” basis, where the bulk of trading
takes place between the USD bloc, JPY bloc, and EUR bloc,
representing the three largest global economic regions.