Forex Market Volume Surges 71 percent to $3.2 Trillion a Day!

September 25, 2007

Bank of International Settlement’s Preliminary Triennel FX Report indicates that global FX volume has surged 71 percent to $3.2 trillion a day! The report was released this morning. The last time it was published was in 2004.

Here are the highlights:

*UK still the most active trading center, but both that and the US are losing ground to countries like Switzerland, Singapore and Australia

*EUR/USD is number one most traded currency pair, but also edging lower as volume increases in other pairs

*US dollar is on the “other side” of 86 percent of all currency trades, down from 89 percent.

These shift in trends reflect increased trading activity in the Asian currency pairs as well as demand for high yielding currency pairs like the Australian dollar for carry trade purposes.

Here is my summary:

The final report will be released later this year. Here is the full report on the BIS site

According to the report:

Against the background of low levels of financial market volatility and risk aversion,market participants point to a significant expansion in the activity of investor groups including hedge funds, which was partly facilitated by substantial growth in the use of prime brokerage, and retail investors.

Posted in FX Volume, Forex, Forex News, Insight