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BoE survey shows pick-up in FX trading

First Published 28th July 2017

This week the Bank of England (BoE) published its semi-annual survey of FX turnover in the UK, covering the period from November 2016 to April 2017.

At 2.44 billion USD per day, volumes are the second highest on record (set in October 2014), up 10% compared to the same period last year and up 12% since the last survey (October 2016). Most of the pick-up was attributable to swaps - likely to be rolls of existing positions. Though spot turnover was up 8% from October 2016 it was down 1% when compared to April 2016.

A more detailed analysis showed gains in both G10 and emerging markets (EM) trading compared to October 2016, with volumes up 6.7% and 8.7% respectively. Compared to the prior year, volumes in G10 were down 3.3% but up 11.2% in EM. (Note that for EM we count both spot and NDF while for G10 we simply count spot). Though the granularity of the data is limited, the increased turnover in EM appeared broad-based and might reflect the pick-up in risk appetite and carry trades in 2017 since the US dollar peaked in early January.

By product, FX options saw a notable increase in turnover, with volumes up about 8.8% since October 2016 and 34.6% since April 2016. This was largely due to a surge in EURUSD options volumes, with trading across other currency pairs more mixed.