Average daily currency turnover in the world's largest foreign exchange centers rose in April from six months earlier, with North America and the UK posting record high volumes, a biannual survey from major central banks released on Monday showed.
Increased activity in the U.S. dollar versus the Japanese yen trade helped boost volume after Japan's aggressive easing efforts pushed its currency sharply lower.
In North America, the average daily volume in over-the-counter foreign exchange instruments, including spot, outright forward, foreign exchange swap, and options reached $1 trillion in April, according to the New York Federal Reserve-sponsored Foreign Exchange Committee.
The gain marked an increase of 27 percent from October and the highest since the survey's inception. Compared with a year earlier, volume rose 17 percent.
The New York Fed released the data as part of a global semi-annual survey of FX turnover. London and New York are the world's biggest currency trading centers.
In the UK, volume jumped from more than two-year lows to record highs. Average daily turnover of spot, outright forwards, non-deliverable forwards, swaps, FX options and currency swaps totaled $2.55 trillion in April, up 26 percent from October 2012 and 19 percent from the same period in 2012, a Bank of England survey showed.
Higher foreign exchange turnover generally means higher market trading revenues for banks, and can also point to increased international trade in goods and services.
Interest in the dollar/yen pair has risen since Japanese Prime Minister Shinzo Abe came to power late last year and pledged to get the economy out of years of deflation.
Subsequently, the Bank of Japan launched a massive bond-buying program in April as part of its monetary easing program. This has driven the dollar 13 percent higher against the yen, while the euro is up 13.5 percent so far this year.
Average daily turnover in the U.S. dollar versus the Japanese yen accounted for about 47 percent of the increase in total average daily volume in North America.
In the UK, turnover in the dollar/yen pair more than doubled to $503 billion per day, making it the second-most-traded pair. In the October survey, when turnover hit its lowest since 2010, sterling/dollar was the second-most actively traded pair after euro/dollar.
London is the largest FX trading center. Spot FX activity jumped 38 percent to $1 trillion a day, up from $730 billion in October. The daily turnover in FX swaps also jumped, to $1.1 trillion per day, from $938 billion in October, while FX options trading rose to $185 billion per day.
According to the BoE's survey of 30 financial institutions, trading in the U.S. dollar increased to 86.9 percent from 86 percent in October. The sum of the percentage shares totals 200 percent, not 100 percent, because two currencies are involved in each transaction.
The euro, the second most actively traded currency, saw its share dip to 36.5 percent from 41.2 percent. Trade in the yen rose to 24.4 percent in April 2013 from 15.1 percent while the pound's share slipped to 15 percent from 16.3 percent in October.
Growth and commodity-linked currencies like the Australian and Canadian dollars and the Mexican peso all took a lower share of volumes, while that of the New Zealand dollar was steady.
CLS VOLUME DATA
The results coincide with data from FX settlement system CLS Bank and the two major electronic trading systems, EBS, owned by ICAP Plc, and Thomson Reuters.
Data from CLS Bank, which was also released on Monday, showed global average traded value was at $5 trillion in April, up 12 percent from October.
Volume data on the Tokyo market showed total turnover for spot, FX swap, forwards and options reaching $348.1 billion in October, an increase of 15.8 percent from the October 2012 survey, according to the Tokyo Foreign Exchange Market Committee.
In Singapore, average daily volume for FX spot, outright forwards and FX swaps rose 6.2 percent to $326 billion, compared with October 2012, according to a survey of 30 financial institutions. Average daily volume for OTC foreign exchange derivatives, or FX options and currency swaps, grew 2 percent to $55 billion.
In Canada, average daily turnover for spot transactions, outright forwards and foreign exchange swaps increased by 20.4 percent to $61.4 billion in April from $51 billion in October 2012.
Total average daily turnover in OTC foreign exchange instruments in the Australian market reached $181.7 billion in April, down 2 percent from October 2012, but up 3 percent from a year ago.
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