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FX trading breaks the three trillion dollars a day mark

In a no turn-up for the books there then announcement, the Bank for International Settlements
(BIS) released figures this week that show that the world is trading
over $3 trillion a day in foreign exchange (FX) instruments in 2007.
These are the results of the three-yearly survey the BIS performs with
the Central Banks around the globe, and this year they discovered that
turnover in traditional FX instruments increased 71% to $3.2 trillion.
This is a fair explosion over the $1.9 trillion of 2004 and the $1.2
trillion of 2001.  In particular, the main surge was from FX swaps, up
by 82% in April 2007.

Average daily turnover in OTC derivatives
(interest rate and non-traditional foreign exchange contracts)
increased by 71% to $2.1 trillion in April 2007.  This compares with
$1.2 trillion in 2004 and $575 billion in 2001,

Turnover of
foreign exchange options and cross-currency swaps more than doubled to
$0.3 trillion per day, outpacing the growth in traditional instruments,
such as spot trades, forwards or plain FX swaps.

Meanwhile,
less growth was recorded in the interest rate markets, where average
daily turnover increased by 64% to $1.7 trillion.

All in all,
there’s a lot of money out there being traded around the world’s
markets and I can’t help wondering why I’m not seeing any of it.  After
all, you would think that if all that money is flowing through the
world’s investment circles I’d be able to pickup some loose change
wouldn’t you?

What’s that?  It’s all speculative and electronic trading.  Well, blow me down … who would have thought (of) it?

About Chris M Skinner

Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, the Finanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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