The Main Market Participants - Part I

The main currency market participants are:

Commercial banks

They hold the primary capacity of currency operations. Other market participants hold accounts with banks and use them to realize their required conversion and deposit-credit operations.

A bank accumulates (through its operations with clients) the combined market needs in terms of currency conversions and effects them with the help of other banks.

Besides fulfilling clients’ requests, banks can also effect transactions on their own behalf. The result is a currency market made up of inter-bank deals.

In the world currency markets, prominent international banks create the main influence as the value of their everyday operations is huge. These banks are Deutsche Bank, Barclays Bank, Union Bank of Switzerland, Citibank, Chase Manhattan Bank, Standard Chartered Bank, etc.

Their main criterion is the prominent volume of their deals which can cause important changes in quotations or in the price of a currency.

Usually, these major players are subdivided into “bulls” and “bears”.

Bulls are interested in increasing the price of a currency while bears are interested in lowering the price.

Usually, the market is in a relatively balanced condition between bulls and bears where the difference in currency quotation changes within rather tight limits.

When imbalance allows bulls or bears to dominate a currency, quotations change much faster.