The Paz Activity Curve

The Paz Activity Curve, 2018

The genesis of the Paz Activity Curve (PAC) came about during a Forex Datasource empirical study seeking to answer how two macro factors ꟷa nation’s gross domestic product (GDP) and foreign trade ꟷ impact foreign exchange (FX) trading volume across geographies. If we found an equilibrium level between FX trading activity and these macro factors, we also desired to understand how these equilibria evolved since 1990 when OTC electronic FX was in its infancy and following other modern milestones. 

Thanks to the ongoing Bank for International Settlements (BIS) triennial FX surveys, the world has a robust look at FX activity data going back to the 1990s for 53 nations. Our pairing of BIS FX data and World Bank’s macroeconomic data provides the basis to address questions such as: 

  • To what extent is FX trading activity level growth correlated to changes in a nation’s GDP and foreign trade?   
  • Is there an equilibrium between FX market development and macro factors that holds true for similar-sized economies? 
  •  Can our understanding of FX activity and a country’s macro factors help us identify the potential for new FX markets or forecast how a macro event will impact an established FX market?  

This report is aimed at senior FX market professionals who oversee FX activity globally or particular geographies for banks, government regulators, and large corporations.



Report insights drawn from the following sources: 

  • Proprietary estimates. Our proprietary estimates encompass FX activity level by geography, with annual frequency to complement BIS triennial surveys and coverage gaps in BIS surveys. 

  • Macroeconomic, trade, and trading secondary data. We evaluated World Bank 2017 GDP and trade statistics for 53 nations included in BIS Triennial FX surveys and for 145 nations not included in the same. 

Most Relevant Audience

This report is available to customers/subscribers of Forex Datasource, and available for free to participants in a Forex Datasource study - see survey links below. 

2019 Best in Class Study (for FX traders)

2019 Best in Class Study (for non FX traders)

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