Foreword : BIS confirms sharp increase of FX volume (+71%) in daily currency trading QUO VADIS electronic trading?

First Published in e-Forex Magazine January 2008

Manfred Wiebogen

CEE Treasury at VOLKSBANK AG Vienna. President ACI The Financial Markets Association

Manfred Wiebogen looks at how the FX industry is undergoing further expansion and the importance of having friends in the markets.

Share |

During the last week of September, the BIS (Bank for International Settlements) published their report on the development of the international Foreign Exchange Markets. This report confirms my foreword in e-FOREX 7/2007 when talking of an "explosion in electronic trading".

Every three years statistics from central banks and monetary authorities are compiled to watch the development in the worlds largest unregulated and most liquid market. The reviewed data comprise the traditional Foreign Exchange business: FX-Spot, Outright Forwards and Foreign Exchange Swaps whilst OTC-Derivatives are reported in a separate statistic.

The FX-industry is undergoing further expansion. In short, the daily traded FX volume increased from 1.880 billion (April 2004) to 3.210 billion in April 2007 - an increase of 71% in just three years! This increase was much stronger than the previous one between 2001 and 2004.

The U.K. (34,1% market share) and the U.S. (16,6% market share) are still the worlds largest Foreign Exchange Markets. The U.S. market share has fallen by 2,6%. The market share of United Kingdom has grown 2,8% whilst the Swiss market share has grown 3,3% to 6,1% in total. Japan now handles 6% and is down from 8,3%. Singapore is the fifth largest FX centre with a market share of 5,8%. Of interest are the developments in some countries, e.g. India. It has now reached 0,9% of the daily world turnover market share and covers some $ 34 billion by 4/2007 a day ($ 7 billion in 4/2004).