FX Trading Volumes Jump to Record $2.88 Trillion in London

Although comparisons with the BIS' Triennial Survey are inevitable, there were similarities in the findings of both reports.

Britain’s daily forex volumes rose to a record high in October 2019, the Bank of England said in its latest triennial report on the FX market, as investors concerned about Brexit developments sought to protect their portfolios.

Daily foreign exchange trading volumes out of London have climbed by 11 percent from the year prior, to a record $2.88 trillion per day in October 2019.

The figure is the highest recorded since the survey began in 2004 and bested the previous record of $2.86 trillion set in April 2019. The results of the latest survey also confirm that London remains the world’s biggest currency trading hub, responsible for nearly 40 percent of global volumes, with daily turnover more than triple that of its nearest rival, New York.

Although comparisons with the Bank for International Settlements’ (BIS) Triennial Survey of FX turnover are inevitable, there were similarities in the findings of both reports. The biggest contributors to the record volumes in London were a 3 percent jump in foreign exchange swaps to $1.49 trillion in October 2019, as well as a 10 percent rise in both currency forwards and NDFs. Uncertainty surrounding Britain’s departure from the European Union had also supported Sterling volumes, the BoE said.

Volumes in some currencies were broadly stagnant

The uptick in volumes traded wasn’t, however, across the board for all major currencies, according to the survey, perhaps a reflection of rising market volatility. Daily turnover in the EUR/USD, the most-traded currency pair, fell by $26 billion or three percent to $831 billion per day. In contrast, GBPUSD turnover jumped by 13 percent, compared with April 2019, posting a record high average daily volume at $431 billion.

Suggested articles

FBS Gives Away Signed FC Barcelona Jerseys for Playing Penalty SimulationGo to article >>

Meanwhile, USD/CNY turnover declined in the six months through October 2019, having yielded $59.1 billion per day, down 14 percent from a record $78.3 billion it hit in the previous survey. This US-Sino pairing ranked the 8th most traded currency pair in London trailing behind EURGBP.

The survey also broke down volume by currency pair and showed that EUR/USD accounted for 28.9 percent of trading volumes, down from 30.4 percent in April 2019. This was followed by GBP/USD, which accounted for 15 percent of volumes, up from 13.5 percent in the previous survey.

The 28 largest banks active in the UK forex market participated in the survey, which showed that most FX products saw a notable advance since the last survey.

Earlier today, Foreign Exchange Committee (FXC) reported its a semi-annual survey that includes FX data from dealers and banks in North American. Per a New York Fed filing, average daily volume in over-the-counter (OTC) foreign exchange instruments was $889 billion in October 2019, down 10.7 percent from the ADV figure in the year before.

Got a news tip? Let Us Know