UK Foreign Exchange Turnover Hits Record07.24.2019
Results of the Foreign Exchange Joint Standing Committee (FXJSC) Turnover Survey for April 2019
In April 2019, 28 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 April 2019 reporting period are available separately.
The main findings of the survey are:
Average daily reported UK foreign exchange turnover was $2,858 billion per day in April 2019, the largest turnover figure on record. This represents a 12% rise from six months ago and a 7% rise from the previous record high of $2,667 billion, reported in April 2018.
Turnover by instrument was mixed. FX swaps rose 23% from October 2018 to record levels, increasing by $270 billion to $1,462 billion per day. This contributed the largest absolute increase to overall turnover. Outright forwards were up 18% from six months ago with an average daily turnover of $317 billion. Currency swaps fell to $26 billion, a 17% fall since the October 2018 round. FX spot, options and NDFs remained at similar levels to those seen in October 2018 ($764 billion, $153 billion and $137 billion respectively).
EURUSD and GBPUSD turnover increased by $124 billion (+18%) and $53 billion (+16%), compared with October 2018, posting record high average daily turnover volumes of $831 billion and $376 billion respectively. USDCNY turnover increased by 6% over the last 6 months (25% since April 2018), to $78.3 billion per day, also a record high, and remains the 7th most traded currency pair in London ahead of EURGBP (8th).
Source: Bank of England
Curtis Pfeiffer, chief business officer at Pragma, a multi-asset quantitative trading technology provider, said in an email to Markets Media: “It is encouraging to see another positive set of results across the FX market, following the publication of the FXJSCsurvey results. With the spot and NDF market remaining stable with similar figures to that of October 2018, it shows that the FX market remains extremely healthy. The remarkable increases within forwards (up 18%) and FX Swaps (up 23%), all contributed to the largest UK foreign exchange turnover figure on record of $2,858 billion in April 2019.
With various political and economic events at the end of the year and into early 2019, traders were able to take advantage of the increased volatility during that time. Overall these are a very successful set of results for the FX market.”
More firms coming into the scope of the Uncleared Margin Rules.
Additional volatility due to unforeseen macro events, particularly the conflict in Ukraine, were contribers.
Turnover rose across all instruments except for currency swaps.
There is a growing trend to combine on- and off-exchange business.
Richard Turner of Insight Investment sees more automation and more transparency around cost and outcomes.