Here is the ranking of currency-trading from the Bank of International Settlement’s 2016 Triennial Central Bank Survey:


And here’s a piechart:


But the question is: does this reflect the size of the economies involved?

Here’s another piechart showing the relative GDP size of the countries that control those currencies (back in 2014, according to UN calculations):


So a few observations we can make straight away:

  1. The US dollar definitely punches above its weight – but that’s to be expected. It’s first on the list of global reserve currencies.
  2. The euro and the Japanese yen seems to trade surprisingly less than you’d expect.
  3. The Chinese yen (renminbi) trade is completely out of sync with the size of its economy.
  4. For that matter, so are India, Russia and Brazil (amongst the emerging markets).

And those continue to hold up when you use the IMF’s estimates for GDP in 2016 (there are a few estimates for GDP in the world, so I thought I’d cover my bases):


The trouble is: GDP numbers don’t really discriminate between local production and trade. And if we’re operating under the assumption that most foreign exchange is done by importers and exporters, then we need to look at something different. So I went to the World Factbook, and pulled some numbers on imports and exports (the latest figures online are 2014 ones):



  1. The Chinese yuan (renminbi) is clearly not in line with China’s foreign trade numbers #exchangecontrol;
  2. There are a few currencies which I suspect are traded as ‘safe havens’:
    1. The Australian dollar
    2. The Swedish krona
    3. The New Zealand dollar (top of this list)
    4. The Norwegian krona
    5. And if I squint, the Swiss franc
  3. And then there are weird things going on with the other emerging market currencies.

Two new measures of league-batting and weight-punching

Here’s a new ranking, showing currency turnover relative to GDP:


But here’s a better ranking (at least, in my view), showing currency turnover relative to gross trade:


In which the New Zealand dollar turns out to be oddly loved by foreign currency traders.

To go back to the original question

I think that there are two things going on here: on the one hand, you have ‘safe’ currencies being traded – and on the other, you have emerging market currencies. Where the emerging markets are concerned, there is this Chinese elephant in the room – which suggests that the global traders must be using something as a proxy for the yuan trades that they can’t do.

Here’s a list of just the emerging market currencies in the top 20:


So yes – yes the Rand does trade relatively more than the other emerging market currencies.

And from this position, it definitely looks like a speculator’s proxy for China.

But perhaps that’s just me.

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at