• Average daily forex turnover reached $2.73tn
  • GBP trading nearly doubled in one year
  • Forex exchange swaps comprised nearly half of this total

London, the biggest forex trading center in the world, reached record high trading levels in April as the GBP and currency swaps picked up. This is according to the latest half-yearly report issued by the Bank of England yesterday.

In April, the average daily turnover of forex trading reached a massive $2.73tn. This represented a 15% increase over six months earlier, with cash trading rising by 8% and swaps trading by 18%.

Compared to October 2017, there was an equally strong increase of 18% in turnover in the GBP, which reached a record $351bn – nearly double that of last year. This happened amid market disappointment over the Bank of England failing to increase interest rates.

CMC Markets Chief Market Analyst Michael Hewson said: “April was a particularly bad month for sterling traders as Carney poured cold water on expectations of a rate hike by the market.”

The GBP/USD strengthened to its highest level since the Brexit referendum in April, reaching $1.4377 at the middle of the month before falling around 5% over the following two weeks after the Bank of England decided not to increase interest rates because of what Governor Mark Carney called “mixed” economic data.

In the EUR/USD pairing, daily turnover escalated by around 11% to $778bn per day. This is the most traded currency pair, and it reached 29% of total trading volumes. The report added that trading in the Chinese yuan also increased by nearly 100% compared to a year earlier.

As far as market share is concerned, foreign exchange swaps made up close to half of the aggregate turnover in London. Cash trading was next, followed by currency forwards.

LEAVE A REPLY

Please enter your comment!
Please enter your name here