Foreign exchange trading hauls itself out of doldrums

Average daily volume in Britain jumped to $1.747 trillion (1.12 trillion) in the year to April 2010, up 31 per cent, the Bank of England said. It rose 15 per cent compared with volume in October 2009.

The Tokyo Foreign Exchange Committee said daily trading volume among 20 major banks in Tokyo rose 15.8 per cent in the year to April.

The New York Federal Reserve Bank said average daily volume in the United States rose to $754bn in April, up 11.8 per cent from October 2009 and 43.1 per cent from April 2009.

Volume slumped in 2009 from 2008 as banks and hedge funds cut back on trading after the global credit crisis. US transactions have yet to recover to the 2008 level but close to the $762bn record reached in October 2008.

Data from foreign exchange settlement system CLS Bank, also released on Monday, showed average global daily settlement values climbed to $1.26 trillion in April 2010 for the spot market from $1.22 trillion in October 2009.

The figures include trading in spot, swaps, forwards and options and comprised foreign exchange transactions made by major domestic and foreign commercial and investment banks.

TheBank of England's figures showed that foreign exchange turnover in London continues to dwarf that in other cities, including New York, Tokyo and Singapore.

Turnover in Britain of spot, outright forwards, non-deliverable forwards and currency swaps rose 15 per cent to $1.62 trillion, while volume in other over-the-counter foreign exchange instruments, such as options, was $127bn, up 13 per cent from October.

The Bank said the US dollar accounted for 85.2 per cent of turnover in UK foreign exchange and over-the-counter derivatives markets in April, decreasing from 85.8 per cent in October.

The euro accounted for 44.6 per cent, against 44.4 per cent six months ago.

The proportion of yen transactions rose to 17.4 per cent from 15.8 per cent.

In the US, the Fed said volume across all instrument types and execution methods and among most currency pairs rose in the latest reporting period.

Average daily volumes in outright forwards and foreign exchange swaps registered new highs in April of $104bn and $203bn, respectively

Daily volume in Tokyo amounted to $294.1bn per day on average in April 2010, compared with $254.2bn in April a year earlier. This was attributed to an increase in margin trading.