London’s Dominance Continues: FX Volume Hits Fresh Record at $2.72 Trillion

Daily foreign exchange trading volumes out of London have climbed by 15 percent in the past six months and 14 percent from the year ago, to $2.72 trillion, the Bank of England said in its latest triennial report on the FX market.

The figure is the highest recorded since the survey began in 2004 and bested the previous record of $2,71 billion set in October 2014. The results of April 2018 survey also confirm that London remains the world’s biggest currency trading hub, responsible for nearly 40 percent of global volumes, with daily turnover more than double that of its nearest rival, New York.

The uptick in volumes traded was across the board for all major currencies, according to the survey, perhaps a reflection of rising market Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term. Daily turnover in the EUR/USD, the most-traded currency pair, rose by 11 percent to $778 billion per day, according to the survey.

Earlier today, Foreign Exchange Committee (FXC) reported its a semi-annual survey that includes FX data from leading dealers and banks in North American. Per a New York Fed filing, average daily volume in total over-the-counter (OTC) foreign exchange instruments was $993.5 billion in April 2018, up 11.7 percent from the ADV figure in the year ago. In addition, the average daily volume was also 5.4 percent higher than the $944.3 billion reported back in October 2017 survey.

According to numbers revealed by an equivalent survey conducted by the Foreign Exchange Market Committee in Singapore, average daily FX during April 2018 was estimated at $534 billion, up 8 percent than it was in April 2017.

Elsewhere, Canada’s Foreign Exchange Committee (CFEC) also reported that local foreign exchange activity amounted to $95 billion a day in April 2018. Accounting for the bulk of the turnover, foreign exchange Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term were up 23.2 percent ($60.5 billion), while spot volumes increased by 15.6 percent ($20.7 billion) and outright forwards remained unchanged at $13.6 billion.