Survey says: U.S. and U.K. FX volume dropped in the fall

Currency trading volumes in the two biggest foreign exchange centers appear to have dropped from the record levels recorded earlier in the year, according to two reports.
The triennial survey of the market conducted by the Bank for International Settlements (BIS) showed record average daily volumes of $1.9 trillion through April. But surveys of the U.K. and U.S.

markets by the Bank of England and the New York Federal Reserve show volumes in those two centers dropped to a combined $917 billion a day for traditional foreign exchange products
from $1,196 billion in April. The two centers account for almost half of all daily trading activity in the foreign exchange markets.
The two aforementioned reports were the first of what will become regular six-monthly surveys of FX market activity. The Bank of England and the New York Fed participate in the BIS’s
survey, but the FX committees of both said they felt the market would benefit from reporting of activity levels more than once every three years. “Our goal in launching this survey is to help market participants identify emerging trends in foreign exchange,” says Mark Snyder, chair of the New York Fed’s committee and head of foreign exchange at State Street bank.
He says more frequent reporting should help market participants manage risk in the fast-moving market. Both committees cautioned that their reports were not directly comparable with the BIS survey because of slight differences in methodology. The Bank of England said the BIS habit of
reporting trade locations based on the sales desk, rather than where the trade was conducted, could have underreported trading in London, the biggest center of activity. Many banks have sales teams across the continent but maintain one main trading floor, often in London. However,
market participants believe trading volumes might have surged since the surveys were taken.
EBS, the biggest inter-bank spot dealing platform, reported its busiest day in 11 years, worth $203 billion, in November. The platform also reported its busiest-ever week in January with an average $162 billion traded daily.

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