Global FX market trades reaches $4tn, survey reveals

2 September 2010

The value of global foreign exchange (FX) market trades has reached $4 trillion, a new report has shown.

A study by the Bank for International Settlements (BIS) revealed that the figure went up by 20 per cent in the period between April 2010 and April 2007.

Growth to turnover is related to increasing trading activity surrounding ‘other financial institutions’ - such as hedge funds, pension funds, insurance companies and non-reporting banks.

The amount of money traded by this demographic went up by 42 per cent to reach $1.9 trillion since the last time the survey was conducted three years previously.

Hideki Amikura, deputy general manager of the foreign-exchange section at Nomura Trust & Banking, told the Wall Street Journal: “The expansion of electronic brokering and algorithmic trading systems has been a major factor in this trend.

“These systems have led to more trading by hedge funds, pension funds and other nonbank investors. In the future, we're only going to see further increases in this kind of trading in the global market."

Further findings from the study showed that UK-based banks accounted for over a third of FX market trades.

The survey showed that 36.7 per cent of trades were made in the UK in April 2010 compared with 34.6 per cent in 2007.

More than 50 banks and financial bodies took part in the latest survey during April of this year.

By Jim Ottewill

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