State, Trends, Challenges And Prospects Of The Modern Global Foreign Exchange Market

Abstract

The daily value of world currency transactions exceeds the total world value of output and the value of all shares and bonds available on the market. The global foreign exchange market is a highly liquid environment, supported by the functioning of global communication systems and round-the-clock electronic trading platforms. The present research aims to identify and study the basic factors and dominants of structural changes in the modern global foreign exchange market in the macroeconomic context and to determine their impact on future market trends. The research methodology is based on the use of general scientific research methods in the analysis of secondary sources and the application of statistical methods of correlation and regression analysis of the influence of global economic factors on the change in the exchange rate of the major currency pairs of the world foreign exchange market. The research has revealed that different currency pairs are sensitive to the influence of different global factors, namely: the monetary aggregate M2 is the most practically significant indicator for USD / EUR and USD / GBP, while for the pair USD / JPY - the price of oil; none of the currency pairs has a statistical dependence on the economic growth of the G7 countries. The increase in the exchange rate of the studied currency pairs from 79% to 90% is due to selected factors, the rest are other factors that influence exchange rates, but are not included in the regression model. The results of the research make it possible to take into account important global factors influencing the international foreign exchange market and forecast changes in exchange rates, which is a necessary condition for successful operational activities of market participants. © 2021,Journal of Management Information and Decision Sciences.