Where does the price on your screen actually come from?

Equities have an exchange, an order book and a consolidated tape. FX has none of those. There is no central exchange for spot FX and no official closing price — only a tiered network of dealers, each quoting its own price to its own clients. Understanding the tiers explains why two screens can disagree at the same instant, and why "the spread" is a fact about your provider rather than about the market.

The tiers, top to bottom

1. Top-tier market makers. A small group of global banks plus a growing set of non-bank electronic market makers. They quote each other on primary venues and internalise enormous volumes against their own client flow.
2. Primary and multi-dealer venues. Central limit order books and streaming platforms where the wholesale price is discovered.
3. Aggregators and prime brokerage. Funds and brokers connect through a prime broker whose credit lets them face many liquidity providers at once, with the streams aggregated into one book.
4. The retail broker. Sits at the end of the chain, receives a stream, adds its own spread, and shows you a price.

Each tier adds cost. In the deepest part of the day, top-of-book EUR/USD in the wholesale market can be a fraction of a pip; a typical retail all-in quote on the same pair is more like 0.6 to 1.5 pips, and far wider on a thin pair or in a thin hour.

Last look

Much FX liquidity is quoted on a last look basis: the price you hit is an indication, and the liquidity provider has a brief window — often single-digit milliseconds — to accept or reject after seeing your request. Rejection is not necessarily misconduct; it is a documented protocol with legitimate uses and well-documented potential for abuse.

The FX Global Code, first published in 2017 by the Global Foreign Exchange Committee and periodically updated since, sets out expected practice on last look, pre-hedging and disclosure. It is a voluntary code of conduct, not law — firms sign a statement of commitment. Knowing it exists, and that a given firm's adherence is a public document, is a genuinely useful literacy point.

The nearest thing to an official rate

When an index fund has to convert currency, it does not want a dealer's quote — it wants a benchmark. The dominant one is the WM/Refinitiv 4 p.m. London fix, calculated from trading over a window around 16:00 London time. The window was widened from one minute to five minutes in February 2015, after investigations into attempted manipulation led regulators in several jurisdictions to fine banks a combined sum running into billions of dollars.

So even the market's most official rate is a constructed average over a window, designed the way it is because of what happened when it was narrower.

What that means for data

Any FX time series you use — from any vendor — is a composite, built from a chosen set of sources and a chosen snapshot time. Two providers can legitimately publish different daily closes for the same pair on the same day. This is normal and is not an error; it is the direct consequence of there being no exchange.

The practical habit: when a number matters, know its source and its snapshot time, and never compare two series with different conventions without checking.

In the data

A free delayed quote is not delayed by the same amount for everything: a currency pair runs roughly a minute behind, a US stock the usual fifteen to twenty. Below, euro-dollar and a US stock fund are quoted together, each with its time stamp.

While New York trades, the two stamps sit about a quarter of an hour apart. Once it closes they drift whole hours apart, because the fund's price freezes at the session's last trade while the currency keeps being quoted through the night: fetched at 08:36 UTC on 29 September 2026, the fund's stamp was 12 hours older than the pair's. Any calculation that mixes the two is comparing two different presents, and only the time stamps reveal it.

Try it now

1. Every bar on the chart below has a close. Go looking for the cut-off that produced it: nothing on this page states one, and nothing could, because the market did not stop. That absence is half the exercise.

2. Compare one of those closes with the same day's published benchmark for the pair. The free one is the ECB's euro foreign exchange reference rate against the US dollar, published on the ECB's website every working day with its history. Record the difference in pips — it is usually small and almost never zero. Two honest snapshots of a market with no bell will disagree.
3. Write down the spread you would be quoted on that pair by any retail provider, and express it as a multiple of the wholesale spread quoted in this lesson. That multiple is the price of being at the end of the chain.