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Global FX Volumes Rise in April 2011

The latest round of semi-annual foreign exchange reports from the world’s central bank FX committees shows that turnover continues on an upward path with London maintaining its status as the world’s largest FX trading centre.

Foreign exchange turnover in the UK grew by 23% in the six months to April, taking the daily average to $2.191 trillion, the highest level of turnover recorded since the surveys began seven years ago.

Trading in FX was up 30% compared to April 2010, according to the Bank of England’s Foreign Exchange Joint Standing Committee (JSC). The increase in turnover was driven by a 32% increase in spot transactions to $919 billion and a 19% rise in FX swaps transactions to $909 billion, the JSC reports.

Dollar/euro was the most traded currency pair in the UK market at 33.5% although it fell slightly from October 2010. The turnover data was collected from 30 financial institutions active in the UK FX market – one institution more than in October 2010.

In the US, average daily volume grew by 3.5% in the six months from October 2010 to a record $799 billion, a rise of 5.9% from April 2010, according to the New York Federal Reserve-sponsored Foreign Exchange Committee.

Unlike in the UK survey, spot turnover actually fell in the US by 5.3% to $395.6 billion compared to April 2010. The drop in spot was made up by a 27% rise in outright forwards turnover to $131.7 billion, a 10.5% rise in FX swaps transactions to $224.2 billion and a 58.8% increase in over-the-counter options volumes to $47.3 billion.

The dollar kept its role as the most actively traded currency with turnover in dollar/euro accounting for 31% of reported turnover. The turnover data was collected from 25 financial institutions active in the US FX market.

A survey from the Singapore Foreign Exchange Market Committee showed average daily reported traditional turnover – spot, outright forwards and FX swaps – in Singapore rose 12.9% in the six months from October 2010 to $314 billion, largely driven by a rise in spot and FX swaps transactions.

Turnover in Australia rose 12% in the six months to April, taking the daily average to US$219.1 billion. Volumes were 14% higher than in April 2010, primarily due to a jump in transactions for outright forwards, FX swaps and options.

Average daily reported turnover in OTC FX derivatives – FX options and currency swaps – was US$47 billion, a 20.5% increase compared to October 2010.

Similarly, the average daily turnover of FX trading in the Japanese market in April increased 8% from the previous year to $284.6 billion, based on data from 20 institutions, according to the Tokyo Foreign Exchange Market Committee.

This was driven by a 10% rise in spot transactions and an 8% rise in FX swaps and forwards. FX options transactions fell during the period. Japan participates in the global survey once a year, compared with the other major central banks who take part twice a year.

The dollar kept its role as the most actively traded currency globally, although its share in the UK and US markets slipped slightly.

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