London

London increases lead in foreign exchange trading as global turnover drops seven per cent

The UK accounted for 37 per cent of global foreign exchange trading in October 2012, according to figures from TheCityUK.

Its estimates are based on individual surveys of foreign exchange activity released by central banks in the UK, US, Japan, Australia, Canada and Singapore.

The UK’s share of global foreign exchange trading was up slightly compared to the previous year, and well ahead of the US (17 per cent down from over 19 per cent a year earlier), Japan and Singapore (with six per cent each). London accounted for the bulk of the UK’s daily turnover averaging USD1,919bn in October 2012.

TheCityUK estimates that average daily global turnover in traditional foreign exchange market transactions (spot transactions, outright forwards and FX swaps) totalled USD4.4trn in October 2012, down seven per cent on the previous year. Despite the fall over the past year the volume of foreign exchange trading is on a long term upward trend, a result of the growing importance of foreign exchange as an asset class, the proliferation of electronic trading platforms which is making it easier to access this market, and an increase in global fund management assets.

Chris Cummings, chief executive of TheCityUK, says: “Twice as many US dollars are traded on the foreign exchange market in the UK than in the US, and more than twice as many euros are traded in the UK than in all the euro-area countries combined.

“Foreign exchange is the most traded financial market in the world and today’s figures show that London is capturing a growing share of this market. The UK’s strong international position is a result of trading generated by prime brokerage, investment banking and hedge funds, three areas of activity that are important to London’s position as a global financial centre.“

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