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The political–economic geography of foreign exchange trading

Author

Listed:
  • Dariusz Wójcik
  • Duncan MacDonald-Korth
  • Simon X. Zhao

Abstract

We propose a conceptual framework for the political–economic geography of foreign exchange trading, focusing on the causes and consequences of the relationship between the international currency system and international financial centres. The framework is used to analyse data for 1995–2013 demonstrating that while the trading activity has boomed, its structure by currency, with USD in the lead, has remained remarkably stable, and its concentration in the NYLON axis has grown. We show that Asian currencies and financial centres have made little progress in the foreign exchange market, and argue that any challenge of RMB to USD would require nothing short of an unprecedented geo-political and geo-economic transformation.

Suggested Citation

  • Dariusz Wójcik & Duncan MacDonald-Korth & Simon X. Zhao, 2017. "The political–economic geography of foreign exchange trading," Journal of Economic Geography, Oxford University Press, vol. 17(2), pages 267-286.
    • Handle: RePEc:oup:jecgeo:v:17:y:2017:i:2:p:267-286.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbw014
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    Citations

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    Cited by:

    1. Dariusz Wójcik & Stefanos Ioannou, 2020. "COVID‐19 and Finance: Market Developments So Far and Potential Impacts on the Financial Sector and Centres," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 111(3), pages 387-400, July.
    2. Cheung, Yin-Wong & Grimm, Louisa & Westermann, Frank, 2021. "The evolution of offshore renminbi trading: 2016 to 2019," Journal of International Money and Finance, Elsevier, vol. 113(C).
    3. Sarah Hall, 2023. "Anticipating Sino-UK fintech networks and the changing geographies of money as infrastructure," Environment and Planning A, , vol. 55(4), pages 931-948, June.
    4. Yannis Dafermos & Daniela Gabor & Jo Michell, 2023. "FX swaps, shadow banks and the global dollar footprint," Environment and Planning A, , vol. 55(4), pages 949-968, June.
    5. Frank Westermann, 2023. "On the Geographical Dispersion of Euro Currency Trading: An Analysis of the First 20 Years and a Comparison to the RMB," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 65(2), pages 263-287, June.

    More about this item

    Keywords

    Foreign exchange; financial centres; geo-politics; geo-economics;
    All these keywords.

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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