The modern foreign exchange market operates as a decentralized electronic network. Trading occurs across a tiered liquidity framework that connects global financial centers through Electronic Communications Networks (ECNs) and interbank matching platforms.
The Tiered Market Architecture
[Tier 1 Interbank Core (EBS/Reuters)] <--- Multi-bank liquidity feeds ---> [Electronic Communications Networks (ECNs)]
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[Retail Traders / Corporate Desks] <--- Prime Broker API Pipelines <------------------+

  • The Tier 1 Interbank Market: The core of global FX liquidity, where major investment banks trade high volumes of currency directly with each other via institutional matching platforms like EBS and Reuters.
  • Electronic Communications Networks (ECNs): Automated trading venues that aggregate liquidity feeds from multiple Tier 1 banks and stream competitive bid-ask spreads to corporate treasuries, hedge funds, and retail brokers.

 
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