Bank of England: Results of FX Turnover Survey

Bank of England: Results of FX Turnover Survey

In October 2021, 27 financial institutions active in the UK foreign exchange market participated in the semi-annual turnover survey for the Foreign Exchange Joint Standing Committee (FXJSC). The survey results are summarised below; more detailed tables, including a market share report, for the October 2021 reporting period are available separately.

The main findings of the survey are:

  • Average daily reported UK foreign exchange turnover was $2,757 billion in October 2021. This represented a 6% decrease on the $2,948 billion turnover recorded in April 2021, and 7% rise relative to the $2,582 billion turnover recorded in October 2020.
  • Turnover in FX swaps fell to $1,428 billion, a decrease of 6% relative to April 2021, and turnover in FX spot decreased by 9% since April 2021, to $730bn. Turnover in outright forwards (+3%) and NDFs (-5%) were mixed relative to April 2021. Turnover in all instruments other than outright forwards decreased when compared to the April 2021 survey.
  • USD/EUR remained the most commonly traded pair in London, with average daily turnover of $768.5 billion in October 2021. This represented a 15% decrease on the April 2021 survey results and a 2% decrease on the October 2020 figures. USD/JPY turnover also fell from $347.0 billion in April 2021, to $289.5 billion in October 2021 (-17%).
  • There was an increase in sterling activity reported in October 2021 relative to April 2021. USD/GBP maintained its position as the second most commonly traded currency pair in London, +13% since April 2021, at $429.9bn. The percentage share of all trades including sterling as a proportion of average daily turnover also rose from 16.6% in April 2021 to 19.7% in October 2021.
  • Other notable changes in trading across major currency pairs include AUD/USD, which increased by 3% since April 2021 to $125.0 billion and became the fourth most traded currency pair.

Tables 1 to 4 below provide various summaries of the average daily data for October 2021, with comparisons to April 2021. See a more detailed set of results tables for October 2021.

See a market share table showing market share information by currency pair, product and counterparty type.

Similar semi-annual surveys were also conducted in October 2021 by the New York Foreign Exchange Committeethe Singapore Foreign Exchange Market Committeethe Tokyo Foreign Exchange Market Committeethe Canadian Foreign Exchange CommitteeOpens in a new window the Australian Foreign Exchange Committee, and the Hong Kong Treasury Markets Association.

Source: Bank of England

Eric Huttman, chief executive of MillTechFX, said in an email:

“Despite relative calm in currency markets, it’s clear that FX turnover remained relatively strong in 2021, rising 7% from October 2020. Research from Millennium Global’s macro team suggests that the divergence between central bank policy is likely to drive currency markets in the short-term and so we could see an uptick in volatility and thus trading volume in the early months of 2022. Against this backdrop, it’s critical that firms implement efficient and transparent FX processes and have a strong FX risk management strategy in place to mitigate the impact of currency exposures and FX costs on their bottom line.”

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