Which Currency market You like most?

The currency market is not just my job. It is a passion and interest of mine and has been so for many years now. I started covering it in 1991 as a journalist in the run up to the Sterling crisis the subsequent year and “Black Wednesday”, September 16, 1992, when the UK currency was forced out of the Exchange Rate Mechanism (ERM) 

and promptly collapsed in value. The abiding memory of mine to this day is of the sheer power of the currency market in its ability to “defeat” the might and resolve of such a respected central bank as the Bank of England, which gave everything it had in its effort to defend sterling’s ERM “floor” against the Deutschmark of 2.7778. It is a memory of currency dealers screaming 

down the phone, of wave after wave of official intervention to support sterling being swatted aside by the sheer weight of selling pressure. The lesson of this neither is nor should be that financial markets will out in all cases. Rather, it is that the currency market has become so huge that it simply cannot be resisted for any length of time. In the case of “Black Wednesday” — or “White Wednesday” 

as many would have it subsequently — the UK economy was experiencing a severe recession and thus simply could not tolerate the raising of UK interest rates needed to support sterling and keep it within its ERM band commitment. The economic pain of this interest rate and exchange rate commitment was completely at odds with the economic reality in the UK at that time. Moreover, 

UK foreign exchange reserves were fast being wiped out in that defensive effort. In 1992, the global currency market’s daily turnover was the equivalent of USD880 billion, according to the Bank of International Settlements (BIS) tri-annual survey. Thus, the Bank of England’s ability to intervene to support sterling, albeit in the billions, 

was dwarfed by the size of the forces opposing it. As of the 1998 BIS survey, daily turnover had increased to some USD1.5 trillion, subsequently falling back to USD1.2 trillion in the 2001 survey in the wake of the creation of the Euro.