UK's FX Market Soars 14% in April, Driven by Rising Swap Trades

Monday, 22/07/2024 | 18:47 GMT by Jared Kirui

Bank of England's survey showed a daily turnover of $3,351 billion in April 2024, an 11% increase from April 2023.

FX swaps accounted for 45% of the total trading volume in April 2024, followed by FX spot trading at 29%.

The UK foreign exchange market experienced significant growth in April 2024, with a reported 14% increase in daily turnover compared to the previous survey in October 2023. According to a survey by the Bank of England, this surge continues a long-term trend of rising trading volumes.

April 2024 FX Turnover

In the semi-annual survey conducted by the Foreign Exchange Joint Standing Committee (FXJSC), 27 financial institutions active in the UK participated, with a daily turnover of $3,351 billion. This figure represented an 11% increase compared to April 2023 and highlights the consistent pattern of higher volumes in April surveys compared to October.

The survey highlighted that FX swaps dominated the trading activity, accounting for 45% of the total volume. FX spot trading followed, representing 29% of the overall market. This distribution of trading instruments remained broadly consistent with the results from October 2023.

The EUR/USD pair continued to be the most traded in the London market, with an average daily turnover of $795 billion, making up 24% of the total volume. The market shares of the other leading pairs, GBP/USD and USD/JPY remained stable compared to the previous survey.

Long-Term Growth Trends

Since October 2008, the UK FX market has seen a remarkable 97% increase in overall turnover, rising from $1,697 billion to $3,351 billion. Notably, Non-Deliverable Forward (NDF) volumes have surged ten-fold, marking the largest growth among all trading instruments during this period.

Meanwhile, in June 2024, CLS reported average daily traded volumes of USD 2.26 trillion, representing a 9.2% increase compared to June 2023. During the same period, there was an overall increase in volumes across all instruments. Specifically, FX spot volumes rose by 9.9%, FX swap volumes by 9.2%, and FX forward volumes by 7%.

In another recent study by Investment Trends, the number of leveraged traders dealing with trade margin forex, CFDs, and financial spread betting in the UK dropped to 173,000 at the end of May, representing a 5% decline over the past year. The figure has been decreasing since 2021 when the number of active leveraged traders was 275,000.

According to the report, the decline is due to new client acquisition and modest reactivation of dormant clients. However, the number of clients who continued to trade spiked to 124,000 from 110,000 over consecutive years, and dormant accounts reduced over the past two years.