Your EUR/USD quote comes from a decentralised network of dealers and trading venues, filtered through your broker's pricing and execution model. There is no single original market price that every platform reproduces. Understanding the wholesale FX market helps explain both the shared influences on quotes and the differences between providers.

What the interbank market really is

The interbank market is the part of wholesale FX in which banks trade with other banks. The wider interdealer market also includes non-bank liquidity providers. It is a network of relationships and venues, rather than one central exchange or a single price available to everyone. Separate the source of a quote, the execution venue and your legal counterparty: these can be different entities.

The BIS December 2025 analysis reports average global OTC FX turnover of USD 9.5 trillion per day in April 2025, across spot and derivatives. This is a dated survey measure, not live executable liquidity, and it does not describe interbank trading alone. Trades with financial customers and interdealer trades are separate counterparty categories.

A dealer can act as principal, taking the opposite side of a client's trade and managing the resulting inventory. It may offset exposure against other customer flows before hedging a remainder externally. A client trade therefore need not produce an immediate, matching interbank hedge. This inventory role is central to a tier-one market maker.

Who actually makes this market

Large bank dealers play important roles, alongside regional banks and non-bank liquidity providers. Survey rankings depend on the surveyed customer group, instruments and methodology. A dealer's share of one commercial survey should not be presented as its share of all global FX turnover without that scope.

Access to diverse customer flows helps a dealer quote and internalise risk. That does not create a single top-ten price-setting hierarchy: pricing is distributed across bilateral relationships, electronic venues and bank and non-bank liquidity providers.

A regional bank may source prices from larger dealers, quote its own customers and manage part of the exposure internally. Its relationships and reporting status vary. BIS turnover statistics apply defined reporting and double-counting adjustments, so its trades cannot simply be described as entering the survey through a larger bank.

A dealer can hedge the remainder rather than copy two orders

Our dealer starts with no EUR exposure. Client A buys EUR 60,000 from it, while client B sells it EUR 40,000. The diagram uses the dealer's perspective: selling to the first client and buying from the second.

Scroll sideways to see the full diagram

Matching opposing flows in a dealer's bookA hypothetical dealer starts with zero EUR exposure. Selling EUR 60,000 to client A produces −EUR 60,000; buying EUR 40,000 from client B produces +EUR 40,000. The balance is −EUR 20,000. Our model assumes an external EUR 20,000 purchase, bringing the balance to zero. Gross client flows total EUR 100,000.DEALER BOOK PERSPECTIVEStart: EUR 0 exposureClient A buysEUR 60,000dealer: −60,000Client B sellsEUR 40,000dealer: +40,000Dealer balance: −EUR 20,000after both client tradesExternal purchase: +20,000balance afterwards: EUR 0Gross client flow: EUR 100,000.Model's external trade: EUR 20,000.

Two hypothetical executed EUR/USD flows in one book, with zero initial exposure and no other positions or quantity changes. We omit prices, costs, settlement and the risk between executions. Buying the remainder externally is our model's rule, not a requirement for every dealer. The document BIS — Trade internalisation confirms that dealers can match opposing client flows in their own book rather than immediately hedge each flow in the interdealer market.

Every exposure amount in the diagram belongs to the same dealer book.

Seeing only an external EUR 20,000 purchase does not automatically reveal the number and sizes of preceding client trades. Equally, two client orders do not prove that two separate interbank trades occurred. Assess execution using specific reports and terms, rather than assuming that every instruction must be passed onward.

How banks trade with each other

BIS distinguishes direct, relationship-based execution from indirect execution through a third party, and voice from electronic channels within each. Electronic venues may be anonymous or disclose counterparties. Primary venues can contribute to price discovery, but they do not supply a single compulsory reference price for every product, size and participant.

Credit limits, trading permissions, size and execution terms can restrict access even when a price is visible. Prime brokerage may provide access through approved credit relationships; it does not make every displayed quote executable. The FX Global Code is a wholesale good-practice standard that supplements applicable law. Its Principle 41 addresses monitoring permitted trades and credit limits; it is not a universal requirement that every pair of participants must extend direct bilateral credit.

Consider an entirely hypothetical purchase of EUR 100,000 at prices in USD per EUR. Offer A at 1.1000 is unavailable to this participant and shows only EUR 50,000. Accessible B offers EUR 70,000 at 1.1001 and C offers EUR 100,000 at 1.1003. Assuming unchanged executed prices and no fees, buying EUR 70,000 from B and EUR 30,000 from C costs USD 110,016, an average of 1.10016. Multiplying the whole order by A’s screen price gives USD 110,000 but does not describe an available execution. The USD 16 difference is a consequence of this model’s access and quantities, not automatically a broker fee or execution error.

Prime brokerage can give a client access to approved executing dealers through the prime broker's credit relationships. It is one route to wholesale access, subject to agreed limits and acceptance conditions, rather than the only possible route for every smaller participant. See the prime brokerage concept.

How the price flows down to your platform

A retail broker may aggregate external quotes, internalise customer risk or combine the two. Bank and non-bank providers compete to quote; inventory, credit, order size and market conditions influence the prices available. This is more varied than a fixed chain in which every lower layer buys and resells the same price.

A retail spread reflects the provider's pricing model and prevailing conditions; it is not a transparent sum of margins charged by a fixed hierarchy. Overnight CFD financing also follows the broker's instrument-specific terms, rather than one universal wholesale-swap formula. See how swap rates are set, retail and institutional trading and forex liquidity. Execution policies can also address last look.

Electronic pricing and execution can be fast, but the path depends on the broker's model. An order may be executed against the broker, routed externally or otherwise handled under its disclosed policy. A recent screen quote is not a guarantee of the fill price or proof that the order reached an external aggregator.

What to do tomorrow

  1. Compare the same product and size. Record the provider, account, time, Bid, Ask and quoted quantity when comparing EUR/USD with another pair. Spread differences can reflect liquidity, inventory, size, credit and the provider’s pricing model; one observation does not establish a single cause.
  2. Compare total execution costs. In a hypothetical EUR/USD position of EUR 10,000, a pip of 0.0001 is USD 1. At unchanged executed quotes, buying at Ask and immediately selling at Bid costs USD 0.80 with a 0.8-pip spread and no commission. A 0.4-pip spread plus USD 0.60 commission for both sides costs USD 1.00. The narrower spread is USD 0.20 more expensive in this model. Exclude slippage, financing and conversion only because they are explicit assumptions here. When profit or loss already uses the actual Ask purchase and Bid sale, do not subtract spread again.
  3. Compare dated spread observations. Record the instrument, provider, account, timestamp and time zone when comparing windows. “Late evening” depends on your location. A spread change alone does not prove which upstream dealer or market caused it.
  4. Put the market structure in order. If you want to understand the full hierarchy of participants, from the central bank down to retail, read our wider walkthrough of the market participants — it complements what I describe here with the broader context of the whole ecosystem.