The foreign exchange market is a decentralized global market that determines the exchange rates for all currencies. The foreign exchange market is the largest trade market. Multinational banks are the primary players in this industry.
BIS Triennial Survey
The BIS Triennial Central Bank Survey is the complete source of data on the size and structure of global foreign currency and OTC derivatives markets. The Triennial Survey aims to improve OTC markets’ transparency and assist central banks, other regulators, how to get liquidity ratio and market participants in monitoring global financial market changes. It also contributes to talks on OTC market changes.
Since 1986, FX market activity has been assessed every three years, while OTC interest rate derivatives activity has been studied every year since 1995. The BIS coordinates the Triennial Survey under the aegis of the Markets Committee and the Committee on the Global Financial System. The G20-endorsed Data Gaps Initiative backs it.
Findings from the 2019 Triennial Survey on OTC FX Market Turnover:
- FX market trading hit $6.6 trillion per day in April 2019, up from $5.1 trillion three years ago.
- The US dollar maintained its dominance, accounting for one side of 88 percent of all trades. On one side, the trading share using the euro increased somewhat, to 32%.
- As in previous polls, currencies from emerging market economies increased their market share, reaching 25% of total worldwide turnover.
- While the number of spot trades grew compared to April 2016, the expansion was less robust than other instruments; therefore, the share of spot trades rapidly declined to 30% in 2019 from 33% in 2016.
- FX trading with “other financial institutions,” i.e., those other than reporting dealers, surpassed inter-dealer trading volumes in April 2019, hitting $3.6 trillion, or 55% of worldwide turnover.
- In April 2019, sales desks in five nations facilitated 79 percent of all foreign exchange trading: The United Kingdom, the United States, Hong Kong SAR, Singapore, and Japan. Trading activity increased faster than the global average in the United Kingdom and Hong Kong SAR.Latest website : forextradenews and Read More About : magazineview
Turnover in foreign exchange markets
Turnover by currencies and currency pairs
The US dollar remained the world’s dominant vehicle currency in April 2019. The global share of EME currencies rose by four percentage points to 25% of total FX turnover. Despite this, the yen’s share in global turnover dropped by five percentage points to 17%. In contrast to 2016, the Hong Kong dollar doubled in 2019. Korean won, Indonesian rupiah, and Indian rupee moved up worldwide.
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Turnover by instrument and maturity
FX spot trading fell to 30% of global turnover in April 2019, down from 33% in 2016 and 38% in 2013. Between 2016 to 2019, trading volumes in currency swaps increased to $108 billion per day.
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Turnover by counterparty
Trading in the inter-dealer market fell below 40% of total FX market turnover in April 2019. Volume traded with non-reporting banks, hedge funds, and PTFs increased, but trading with institutional investors declined. Nas100 brokers turnover rose to $1.5 trillion, a 68% increase compared with April 2016.
The United Kingdom, the United States, Singapore, Hong Kong SAR, and Japan are the top five FX hubs. China recorded a significant rise in trading activity to $136 billion in 2019 or an 87% increase since 2016.