The UK accounted for 36% of global foreign exchange trading in April 2009 according to International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide. IFSL’s latest Foreign Exchange report states that the UK’s share of the global foreign exchange trading was slightly down compared to April 2008, but well ahead of the US (14%), Japan (7%) and Singapore (6%).
Average daily global turnover in traditional foreign exchange market transactions (spot transactions, outright forwards and FX swaps) totalled $2.9 trillion in April 2009, down nearly a quarter on the previous year’s record total. Overall turnover, including non-traditional foreign exchange derivatives and products traded on exchanges, averaged around $3.1 trillion a day. The decline in trading volume during the year was broad based across all currency pairs, instrument types and geographic regions. Weaker global trade due to the economic slowdown, a fall in activity by international investors in particular of hedge funds, and deleveraging all contributed to the decline in trading.
Marko Maslakovic, IFSL’s Senior Economist said: “The economic downturn did not interrupt liquidity in the foreign exchange markets, and foreign exchange was one of the few sources of steady profits for global banks over the past year. Bank revenues benefitted from relatively strong trading volumes since the start of the credit crisis, and a widening of foreign exchange trading spreads resulting from increased counter-party risk and volatility.”
London accounted for the bulk of the UK’s daily turnover averaging $1,269bn in April 2009. Its strong international position stemmed from trading generated by prime brokerage, investment banking and hedge funds, three areas of activity that are important to London’s position as a global financial centre. Twice as many US dollars are traded on the foreign exchange market in the UK than in the US, and more than twice as many euros are traded in the UK than in all the euro-area countries combined. Foreign owned institutions accounted for around 70% of foreign exchange trading in London.
Average daily global turnover in traditional foreign exchange market transactions (spot transactions, outright forwards and FX swaps) totalled $2.9 trillion in April 2009, down nearly a quarter on the previous year’s record total. Overall turnover, including non-traditional foreign exchange derivatives and products traded on exchanges, averaged around $3.1 trillion a day. The decline in trading volume during the year was broad based across all currency pairs, instrument types and geographic regions. Weaker global trade due to the economic slowdown, a fall in activity by international investors in particular of hedge funds, and deleveraging all contributed to the decline in trading.
Marko Maslakovic, IFSL’s Senior Economist said: “The economic downturn did not interrupt liquidity in the foreign exchange markets, and foreign exchange was one of the few sources of steady profits for global banks over the past year. Bank revenues benefitted from relatively strong trading volumes since the start of the credit crisis, and a widening of foreign exchange trading spreads resulting from increased counter-party risk and volatility.”
London accounted for the bulk of the UK’s daily turnover averaging $1,269bn in April 2009. Its strong international position stemmed from trading generated by prime brokerage, investment banking and hedge funds, three areas of activity that are important to London’s position as a global financial centre. Twice as many US dollars are traded on the foreign exchange market in the UK than in the US, and more than twice as many euros are traded in the UK than in all the euro-area countries combined. Foreign owned institutions accounted for around 70% of foreign exchange trading in London.
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