Daily Spot Trading in London Shrinks According to Bank of England Data

Author Paul Holmes

In April 2012, 30 financial institutions active in the UK foreign Exchange market participated in the sixteenth published semi-annual turnover survey for the Foreign Exchange Joint Standing Committee (JSC). The survey results are summarised below; more detailed tables, including a market share report, for the April 2012 reporting period are available separately.

Average daily reported UK foreign exchange turnover was $2,000 billion in April 2012, 2% lower than in October 2011, and 5% lower than a year earlier. The fall in turnover was driven by a 12% fall in spot activity, to $711 billion per day in April 2012.

Conversely, turnover in FX Swaps rose 8% from October 2011, to $957 billion per day. According to the survey of 30 financial institutions, the U.S. dollar was the most actively traded currency although its share dropped to 86.6 percent in the six months to April from 87.7 percent last October. The euro, the second most actively traded currency, also saw its share dip to 43.4 percent from 44.9 percent.

Trade in the British pound, Swiss franc and Japanese yen increased, with the safe haven yen showing the largest rise in the share of trading, climbing to 15 percent from 13.9 percent.

The relatively illiquid Norwegian and Swedish krone also rose, at the expense of the so-called commodity currencies; the Canadian, Australian and New Zealand dollars.

Similar semi-annual surveys were also conducted in April 2012 by the New York Foreign Exchange Committee, the Singapore Foreign Exchange Market Committee, the Tokyo Foreign Exchange Market Committee, the Canadian Foreign Exchange Committee, and the Australian Foreign Exchange Committee.

Participating Banks

ANZ Lloyds Banking Group, Bank of America Merrill Lynch, Morgan Stanley, Bank of New York Mellon, National Australia Bank, Bank of Tokyo-Mitsubishi UFJ, Nomura, Barclays, Rabobank, BNP Paribas, Royal Bank of Canada, Citigroup, Royal Bank of Scotland, Commonwealth Bank of Australia, Skandinaviska Enskilda Banken, Crédit Agricole CIB, Société Générale, Credit Suisse, Standard Chartered, Deutsche Bank, State Street, Goldman Sachs, Toronto Dominion, HSBC, UBS, ING Bank, Unicredit, JP Morgan Chase and Westpac Banking Corporation

Reported UK foreign exchange market turnover by instrument

Daily averages in billions of US dollars

Spot transactions 804 711

Outright forwards 155 155

Non-deliverable forwards 37 36

Foreign exchange swaps 882 957

Currency swaps 27 29

Foreign exchange options 132 112

Total foreign exchange turnover 2038 2000