Daily foreign exchange trading turnover in London, Tokyo and New York soared in the latest year, bouncing back sharply from a crisis-induced decline, data released on Monday showed.
Average daily volume in Britain jumped to $1.747 trillion in the year to April 2010, up 31 percent, the Bank of England said. It rose 15 percent compared with volume in October 2009.
The Tokyo Foreign Exchange Committee said daily trading volume among 20 major banks in Tokyo rose 15.8 percent in the year to April, driven largely by increased margin trading.
The New York Federal Reserve Bank said average U.S. daily volume rose to $754 billion in April, up 11.8 percent from October 2009 and 43.1 percent from April 2009.
Volume slumped in 2009 from 2008 as banks and hedge funds cut back on trading after the global credit crisis. Though it has yet to recover to its 2008 level, U.S. transactions were close to the $762 billion record reached in October 2008.
Data from FX settlement system CLS Bank, also released on Monday, showed average global daily settlement values climbed to $1.26 trillion in April 2010 for the spot market from $1.22 trillion in October 2009.
The figures include trading in spot, swaps, forwards and options and comprises foreign exchange transactions made by major domestic and foreign commercial and investment banks.
LONDON ON TOP
The BoE's figures showed that forex turnover in London continues to dwarf that in other cities, including New York, Tokyo and Singapore.
Turnover in Britain of spot, outright forwards, non-deliverable forwards and currency swaps rose 15 percent to $1.62 trillion, while volume in other over-the-counter FX instruments, such as options, was $127 billion, up 13 percent from October.
The BoE said the U.S. dollar accounted for 85.2 percent of turnover in UK foreign exchange and over-the-counter derivatives markets in April, decreasing from 85.8 percent in October.
The euro accounted for 44.6 percent, against 44.4 percent six months ago. The proportion of yen transactions rose to 17.4 percent from 15.8 percent.
The Fed said volume across all instrument types and execution methods and among most currency pairs rose in the latest reporting period.
Average daily volumes in outright forwards and foreign exchange swaps registered new highs in April of $104 billion and $203 billion, respectively
Daily volume in Tokyo amounted to $294.1 billion per day on average in April 2010, compared with $254.2 billion in April a year earlier.
We think the growth reflected an increase in margin trading, Akira Hoshino, chair of the Committee, told reporters.
Dollar/yen remained the most heavily traded pair, with daily average turnover of $184 billion, or more than 60 percent of the entire market.
Tokyo spot trade rose 37.4 percent over the year to April, the largest gain in three years, but swaps volume rose a milder 1.5 percent.
In recent years, Tokyo has competed as an Asian financial hub with Singapore and Hong Kong, which have attracted banks and hedge funds through various tax and regulation advantages.
Singapore's daily foreign exchange turnover rose to $238 billion in April 2010, up 3.2 percent from October 2009, the Singapore Foreign Exchange Market Committee said Monday.
Average daily turnover in over-the-counter foreign exchange derivatives in Singapore was $51 billion, a 65.3 percent increase compared to October 2009.
(Reporting by Steven C. Johnson in New York, Hideyuki Sano in Tokyo and Jessica Mortimer in London; editing by W Simon )