The UK’s foreign exchange (Forex) market saw average daily trading volume (ADTV) decline to $3.2 trillion in October 2024, marking a 5% decrease from April levels while maintaining its position as the world’s largest currency trading hub. Compared to the $7.5 trillion daily turnover of the entire market, this means that London accounts for nearly half of all transactions.
UK Foreign Exchange Trading Volume Dips 5% in Late 2024
According to the latest semi-annual survey by the Foreign Exchange Joint Standing Committee (FXJSC), the decline follows historical seasonal patterns where October typically shows lower activity than April. Despite the sequential dip, trading volumes grew 10% compared to October 2023, highlighting the market’s continued expansion.
FX swaps continued to dominate trading activity, accounting for 44% of total volume, while spot transactions represented 28% of trades, similar to results from April 2024 survey. The euro-dollar remained the most actively traded currency pair, with daily turnover of $797 billion, representing a quarter of all trading activity.
“Market share of the top three traded currency pairs; EUR/USD, GBP/USD and USD/JPY, remained broadly in line with previous surveys,” the report added.
The survey, which included responses from 25 major financial institutions active in the UK foreign exchange market, reveals that overall FX trading volume has nearly doubled since October 2008, growing from $1.7 trillion to $3.2 trillion daily.
BIS vs. FXJSC survey
The data in this report is similar to what the Bank of International Settlements (BIS) triennial survey collects, but the FXJSC gathers it more frequently. Additionally, the FXJSC survey reports based on where the price-setting dealer is located, whereas the BIS triennial survey uses the location of the sales desk as its reporting basis.
The latest BIS survey, released in October 2022, covers data from April of that year. It shows that the ADVT in the UK foreign exchange market reached $3,755 billion, an increase from $3,576 billion per day recorded in April 2019.
The UK remains the largest hub for foreign exchange activity, accounting for 38.1% of global turnover. While this marks a decline from 43.2% in April 2019, the 2022 survey indicates that the UK’s global market share remains generally consistent with levels seen in previous surveys.
Although London still leads the market, its share in the global FX trading has been declining in favor of competitors, especially after Brexit. The U.S. market is expanding rapidly, while other locations in Germany and France are beginning to take over London’s role in Europe. The latest BIS survey, expected to be published this year, should provide further insight into the UK’s position in the global FX ecosystem.
This article was written by Damian Chmiel at www.financemagnates.com.Institutional FXRead More
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