FAQ: BIS Triennial Foreign Exchange Turnover Survey

How much growth has foreign exchange
experienced from the last report in April 2013?
  Overall trading in
foreign exchange has fallen from a year to year basis. Markets in April 2016
saw turnover fall to $5.1 trillion from $5.4 trillion due primarily to less
movement in the JPY in the current market environment. 

What is the break down among the different
foreign exchange products? 
Spot transactions fell to $1.7 trillion in
2016 from $2.0 trillion three years prior in 2013, a 19% decline.  
It is the first decline since 2001.     Turnover of fx
swaps rose 6% to $2.4 trillion.  


Was there a significant cause of the growth in fx swaps?
  The BIS
cited the increased turnover of the Japanese yen as an important driver. 

Which currency was the most highly traded?  
The US dollar was on one side of 87.6% of trades, up slightly from the
previous survey 

Were there any other notable shifts in the
currencies that are actively traded?
The euro, yen and Australian
dollar lost market share while emerging markets overall increased with the
Chinese yuan leading the pack in growth.  The yuan accounted was on one
side of 4% of the trades, up from 2.2% in 2013.   After the yuan, the
emerging market currency with the highest turnover is the Mexican peso with
a 2.1% share, down from 2.4%  in 2013. 

Which participants were most active? Shares
of trading grew among reporting dealers to 42% of turnover from 39% in 2013.
Banks and institutional investors were the second and third largest group of
counter parties for turnovers of  22% and 16% respectively.  Hedge
funds and prop desks saw their market share drop to 8% from 11%
previously. 

What the most important financial centers for
foreign exchange turnover?
  The UK remains the largest center,
accounting for 37% of the turnover, reflecting some slippage from its 2013 41%
share.  The US share was steady at 19%.  EMU countries had a 8%
share, down slightly from the previous survey. 

 

(with assistance from my colleague Dimitrios Skambas)

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