Three years have passed since the last issue of the Bank’s of International Settlements triennial report on the FX market. So today was the right time for the release of the 2019 version of the Triennial Central Bank Survey of FX and over-the-counter (OTC) derivatives markets. As always, the report is based on the data from April of this year. Also, this report will get an update in 3 months (on December 8), which may alter the volume values a bit. Here are the most important highlights from this issue:
- Overall FX trading volume rose from $5.1 trillion to $6.6 trillion per day — a 30% growth in 3 years.
- Most of the growth happened in non-spot (derivative) transactions; spot market’s share fell from 33% to 30%.
- The share of trading done with non-financial customers (retail Forex brokers and traders go into this category) fell from 7.5% to 7.2% across all instruments, but gained from 7.1% to 8.0% for spot FX transactions.
- Five countries — the UK, the USA, Singapore, Hong Kong, and Japan — represented 79% of the global FX turnover by geographical location — unchanged from the three years before. The United Kingdom’s share saw a rapid rise from 36.9% to 43.1% despite the looming Brexit.
- FX trading done in China also grew in volume significantly — its share in the total rose from 1.1% to 1.6%.
- The share of the US dollar in transactions rose slightly from 87.6% in 2016 to 88.3% in 2019.
- The euro‘s popularity also gained — from 31.4% to 32.3%.
- The Japanese yen decreased significantly in popularity — from 21.6% to 16.8%.
- The share of currencies of the emerging market economies went up from 21.2% to 24.5%.
- The EUR/USD pair tried to recover some of its turnover share lost from 2013 through 2016. This time it rose from 23.1% to 24.0% (still below the 2013 level of 24.1%).
- GBP/USD, AUD/USD, and USD/CAD were the only other major currency pairs demonstrating growth daily volumes in the 2019 report.
- The popularity of USD/JPY continued to decline even further in 2019 — its volume decreased from 17.8% to 13.2%.
This table shows all the currency pairs that registered at least 1% of total share of FX turnover in 2019:
If you have some questions or comments about how the global foreign exchange market is developing, please feel free to post them below.