Global FX vol reaches Four Trillion USD according BIS Survey

The Bank of International Settlements (BIS), has just released the latest 2010 Triennial Survey survey of global FX market volumes (the most authoritative survey of global FX market activity)

Headline items from the survey are: (full  report available here)

• Global FX turnover was 20% higher in April 2010 than in April 2007, with average daily turnover of $4.0 trillion compared to $3.3 trillion

• Surge in Spot Activity: 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

• Bank to client volumes exceeded Bank to Bank volumes For the first time: Activity of reporting dealers with other financial institutions surpassed inter-dealer transactions (ie transactions between reporting dealers). Other Financial Institutions, a category that includes non-reporting banks, hedge funds, pension funds, mutual funds, insurance companies and central banks, grew by 42%

• London remains top: London retained position as top global center with 37% of global volumes, followed by NY with 18%

• Top currencies: USD, EUR and JPY remain the top traded currencies (up3% over 2007), with
• EURUSD: 27%
• USDJPY: 14%
• GBPUSD: 9%

Unlike the Bank of England surveys, the BIS survey does not break down the trading volumes to show execution by single vs multi bank platform.

PERSONAL OPINION:

Decline in Interbank Volumes: Its interesting to see the continued decline of interbank volumes (dealer to dealer) as a pct of total FX volumes. Which in my opinion is due largely to the top banks improving their etrading systems to enable them to "internalize flow", and reduce the need to hedge positions in the external interbank market. (see my previous blog on internalising FX flows)