LONDON (Reuters) – Trading on the London foreign exchange market hit a record high in April of $3 trillion in average daily turnover, the Bank of England said on Tuesday, with significant increases in volumes dollars, pounds sterling, Japanese yen and commodity currencies.
In its bi-annual survey of turnover at the world’s largest foreign exchange centre, the bank said average UK foreign exchange volumes reported daily were up 24% from April 2020 levels. This is explained by the strong increase in trading in swaps, spot and forward products.
Currency market volatility has declined since a COVID-19-triggered rout in 2020, but with record trading volumes in stock markets continuing to rise in 2021, demand to buy and sell currencies has also increased.
Along with double-digit percentage increases in the major currency pairs traded – euro/dollar, pound/dollar and dollar/yen – a huge rise in commodity prices over the past year as investors bet on a strong global economic rebound, fueled strong increases in Canadian and Australian dollar trade.
Canadian currency trading against the US dollar jumped 46% from April 2020 levels to a daily average of $136.7 billion, while Aussie trading increased up 30% to $121.3 billion, the Bank of England said, making it the fourth and fifth most traded. currency pairs respectively.
Several emerging market currencies such as the Indian rupee also saw strong gains.
The Swiss franc was one of the few to see its turnover fall, as trading against the dollar fell slightly from a year ago.
Chinese yuan activity rose sharply last April, but has fallen since the October survey.
(Reporting by Tommy Reggiori Wilkes; Editing by Mark Potter)
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