Triennial Central Bank Survey Report on global foreign exchange market activity in 2010

The BIS is releasing today the results for both turnover and positions in foreign exchange instruments.

1. Turnover in April 2010¹

• Global foreign exchange market turnover was 20% higher in April 2010 than in April 2007, with average daily turnover of $4.0 trillion compared to $3.3 trillion.
• The increase was driven by the 48% growth in turnover of spot transactions, which represent 37% of foreign exchange market turnover. Spot turnover rose to $1.5 trillion in April 2010 from $1.0 trillion in April 2007.
• The growth of turnover in other foreign exchange instruments was more modest at 7%, with average daily turnover of $2.5 trillion in April 2010. Turnover in outright forwards and currency swaps grew strongly (by 31% and 36%, respectively). Turnover in the large foreign exchange swaps segment was flat relative to the previous survey, while trading in currency options fell.
• Activity was supported by the increase in trading by "other financial institutions" - a category that includes non-reporting banks, hedge funds, pension funds, mutual funds, insurance companies and central banks. Turnover with these counterparties grew by 42%, rising to $1.9 trillion in April 2010 from $1.3 trillion in April 2007.
• Reflecting further foreign exchange market globalisation, cross-border transactions represented 65% of trading activity in April 2010, the highest share ever.
• The relative ranking of foreign exchange trading centres changed slightly from the previous survey. Banks located in the United Kingdom accounted for 37% of all foreign exchange market turnover, against 35% in 2007, followed by the United States (18%).

2. Amounts outstanding and gross market values at end-June 2010

• Growth in the positions of OTC foreign exchange instruments was moderate at 9%, compared with an increase of 83% in notional amounts outstanding of currency instruments in the 2004-07 period.
• In contrast, market values of these instruments almost doubled against a backdrop of increased financial market volatility during mid-April and early June 2010.
• Trading activity with other financial institutions also drove the increase in the global foreign exchange positions. Their share (45%) surpassed transactions with reporting dealers (36%) for the first time in 2010.

Detailed tables, expanding those published on 1 September 2010, are appended to the report.

¹ Final data; preliminary turnover data were published on the BIS website on 1 September 2010.