Market Maker

Who are the biggest players involved in the Forex?
The biggest players are called market makers and they usually consist of the world’s largest banks and financial institutions. Because of their size, they are the ones who can directly set currency rates which other participants use. They also devote a large portion of their operations to provide liquidity in the market by completing orders for buying and selling from individual traders that amount to billions dollars each day.

To be a market maker, an institution has to have the power and influence to change exchange rates by enacting a policy. There are many market makers in the Forex including Barclays, Deutsche Bank, and Citigroup and brokers can choose which among them they want to deal with in order to fulfill their clients’ transactions.

Different markets have different market makers. For example, the currency pair USD/CHF has the Union Bank of Switzerland and Credit Suisse as the main market makers. For the rouble, it is the Onexim Bank and Moscow Bank that heavily influences the rate along with the Central Bank of Russia.

Everyone below market makers are considered market users and it is with them that market makers determine exchange rates. They do this by conducting transactions with smaller financial organizations such as other banks and brokerage companies and setting the quote rates. These quotes are then used by other market users including smaller banks and individual brokers and traders to conduct their transactions. User can then only either accept the rate and trade or refuse it and not participate in the market.