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UK FX Turnover Drops To $2 Trillion a Day

Foreign exchange average daily trading volume in the UK, the world's biggest FX dealing hub, fell 2% to $2 trillion a day in April 2012 from October, according to a semi-annual survey published today by the Bank of England’s Foreign Exchange Joint Standing Committee. Average daily trading declined 5% from a year earlier, according to the survey.

The decline 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. The BOE measured activity by collecting data from 30 UK-based financial institutions.

In outright forward transactions, average daily volume remained unchanged in April from October at $155 billion. The average daily volume of non-deliverable forwards fell slightly to $36 billion from $37 billion in October. The average daily volume of FX options was $112 billion, a 15% decrease from $132 billion in October.

According to the survey, the US dollar was the most actively traded currency, although its share dropped slightly to 86.6% in the six months to April from 87.7% last October.

The euro, the second most actively traded currency, also saw its share dip to 43.4% from 44.9%. The following three most traded currencies were the pound sterling at 17.2%, the Japanese yen at 15% and the Australian dollar at 8.7% of the volume, which totals 200% because transactions always involve two currencies.

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