Who moves the market? forex question

From what I’ve read, I think not only central banks but the greatest volume of currencies are also traded by commercial and investment banks. These banks facilitate forex transactions for their customers. However, central banks move the market by controlling the price of its native currency. They intervene in the currency market to stabilize the nation’s economy.
 
davidrichard said:
From what I’ve read, I think not only central banks but the greatest volume of currencies are also traded by commercial and investment banks. These banks facilitate forex transactions for their customers. However, central banks move the market by controlling the price of its native currency. They intervene in the currency market to stabilize the nation’s economy.
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you got it right
the big tractions between the counties have an impact of those currencies too
 
narafa said:
Some points here seem valid, others not. It's true that a large portion of the FX liquidity is controlled by around 4-5 banks as mentioned (Citi, Deutsche, JP Morgan, UBS). These are the banks with the most connections to corporations, transacting with them for international trade and foreign currency conversions.

It's true that the big banks have a better visibility on order flow, but it's not really true that they monitor the retail positions in the market (As this is a very tiny portion of what's happening in the market). The banks will rarely take directional positions as they seek to profit from matching opposing order flows (Acting primarily as liquidity providers or market makers), thus profiting from the spreads.

On top of the spot FX desks, the derivatives desks in the banks create custom made structures (Using FX options, swaps and swaptions), sometimes worth hundreds of millions of dollars & sell them to corporates. Those structures act like selling naked or covered options, but they are much more complex as they might involve many legs spanning several months in the future and cannot really be exited as there is no market for them except to close them out with your counterparty. This is where the manipulation of the WM/Reuters fixing comes into place, as this WM/Reuters fixing is the basis for valuing those structures and determining if the structure would be a profit or a loss for the bank (And the corporate who bought that structure), hence the attempt to manipulate it as it makes or breaks billions of dollars in structured products the banks have in place.
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thanks for your nice post , its a good reply with many nice information , for some fine lines.
 
The forex market moves because of supply and demand. The main participants in the forex market include central banks, hedge funds, and financial institutions. Because of their big size in the market, which is over 50%, trading decisions by banks influence the forex market the most. However, socio-economic factors also move the forex market.
 
i know no certinity in there but of course market has a own trend and it never breaks its own trend, i hope you got the message.
 
sometimes candlestick never follows at any trend , they move at random and most of the traders in that time above all beginners level lost their major equity.
 
It is the outcome of demand and supply. However, forex is a manipulative market. And more than 50% of the forex market is central banks. There trading decisions move the market and have the biggest impact.
 
bindaytrader said:
There are 6 big players that move the market i dont remember their names,but JP Morgan is one of them
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I think they are more than that now. The people now have a swing at the market with their reactions, especially with social media now in play
 
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