Global Currency Market Shifts: Fees, Liquidity & De-Dollarization Trends

When evaluating the economics of currency exchange, several concrete realities and emerging trends deserve close attention. First, beyond just convenience fees, the bid-ask spread is a key source of profit for providers. Airport exchanges often offer worse rates—both broader spreads and added flat/percentage service fees—due to oligopolistic positioning and captive customer base. For example, several expert sources suggest that exchanging currency at the airport should be limited to what’s needed immediately, and that the bulk should be done through less expensive channels like local banks or online providers.

Second, in the card payments side, many U.S. credit cards carry a standard foreign transaction fee of ~3%, adding up over travel or international e-commerce spend. However, many travel rewards cards now waive these fees, and there is a competitive battle among issuers to attract globally active customers through these fee waivers. So consumers have options—card-issuers that understand global mobility emphasize no foreign transaction fees as a perk.

Third, the underlying FX markets are enormous and highly liquid. In the North American OTC market, average daily turnover (covering spot, forwards, swaps, and options) reached approximately $1.38 trillion in April 2025, up ~15% from October 2024 and ~18% YoY in many components. While high volume generally reduces individual spreads and increases competition, it also heightens sensitivity to global shifts—liquidity risks and funding mismatches are increasingly flagged by bodies like the IMF, especially in non-bank sectors and currencies heavily exposed to U.S. dollar fluctuations.

Fourth, beyond consumer-level implications, there are strategic shifts in currency regimes and reserve compositions. The U.S. dollar still holds around 58% of official foreign reserves; the euro remains second with approximately 20%, and the renminbi under 3%. Some countries are increasingly engaging in de-dollarization efforts—bilateral trade in local currencies, bilateral swap lines, and digital currency alternatives—to reduce exposure to dollar dominance. These shifts mean that forward-looking financial institutions must account for risk under currency regime changes, convertibility constraints, and political risk in FX exposure.

Finally, for users—travelers, corporates, or exporters/importers—the practical takeaways are: compare rates (not just fees), use cards with favorable FX and foreign transaction policies, plan ahead for exchanges, and stay aware of geopolitical and policy risks (e.g. sudden restrictions on currency convertibility) that may affect access and cost of FX liquidity.