Trading in FX markets averaged $5.3 trillion per day in April 2013, according to the Bank for International Settlements (BIS).
Preliminary global results from BIS’s 2013 Triennial Central Bank Survey of Foreign Exchange and OTC Derivatives Markets Activity found that FX trading was significantly up from $4 trillion in April 2010 and $3.3 trillion in April 2007.
FX swaps were the most actively traded instruments in April 2013, at $2.2 trillion per day, followed by spot trading at $2 trillion.
According to BIS, financial institutions other than reporting dealers were driving the growth of FX trading. Smaller banks (which did not participate in the survey as reporting dealers) accounted for 24% of turnover, with institutional investors, such as pension funds and insurance companies, representing 11%, and hedge funds and proprietary trading firms another 11%. Trading with non-financial customers, mainly corporates, contracted between the 2010 and 2013 surveys, reducing their share of global turnover to just 9%.
The US dollar remained the most traded currency and was on one side of 87% of all trades in April 2013. The euro was the second most traded currency, but its share of trades fell to 33% in April 2013 from 39% in April 2010.
In April 2013, sales desks in the UK, the US, Singapore and Japan handled 71% of FX trading, up from 66% in April 2010.
Sally Percy is editor of The Treasurer