Thursday, September 5, 2013

Forex volume surges to 5.3 Trillion per day

Foreign-exchange trading surged to an average $5.3 trillion a day in April 2013, boosted by greater yen volumes, the Bank for International Settlements said.
Trading increased 33 percent since the same period in 2010, the BIS said, citing a survey of currency traders it runs every three years. That’s an acceleration from a 20 percent increase in the three years through 2010. The yen had the biggest jump in trading activity among major currencies, while the euro’s role as the second-most traded currency was reduced. Emerging-market currencies increased their share, with the Mexican peso entering the top 10 most-actively traded currencies.
Volumes in the global foreign-exchange market are increasing as traders expand activities in developing nations and banks focus on the currency markets while stricter regulations after the financial crisis threaten earnings from other divisions. Transactions jumped this year as diverging economies stoked increasing swings in exchange rates.
“Post the financial crisis in 2008, foreign exchange has been a very interesting asset class for banks and investors to focus on because of the liquidity and diversity,” said Vincent Craignou, the London-based global head of foreign exchange and precious metals derivatives at HSBC Holdings Plc. “It has also become extremely competitive because a lot of banks have been keen to grow market share.”