Forex Spot Trading Volume at Lowest Level in More than 3 Years

Unfortunately the forex market has not escape the impact of global deleveraging and the failure of Lehman Brothers in 2008. Central banks from around the world have released their semi-annual foreign exchange surveys and based upon all of the reports, forex trading volume decreased significantly between April 2008 and April 2009. Investors large and small have reduced risk with carry trades unwound aggressively. The lack of participation may explain why the major currency pairs have been stuck in a range since the beginning of May. In New York for example, forex spot trading volume fell to the lowest level in more than 3 years.

London remains the most active forex trading center followed by NY and Tokyo. The EUR/USD is still the most actively traded currency pair by far.

Here are some stats (all of data is in billions of U.S. dollars):

London (link to report)

  • Britain is the world’s biggest FX trading hub with over a third of global turnover.
  • Average daily turnover in forex products fell 20% since October 2008 to $1,356B, down 25% from April 2008
  • Majority of decline was attributed to less activity in spot FX which fell 28%
  • The most heavily traded currency pair was euro/dollar, which accounted for 32% of total turnover.

New York (link to report)

  • Daily FX market turnover fell 26.3% to $527B, the lowest level since October 2005
  • Spot transactions dropped 25.2%, Option trades fell 48.4%

Most Heavily Traded Currencies (Spot Transactions) in NY

Tokyo (link to report)

  • Daily FX Market Turnover Fell 16 percent

Singapore (link to report)

  • Daily Foreign Exchange turnover down 21 percent compared to October 2008

Canada (link to report)

  • Daily Foreign Exchange turnover down 11.3 percent, lowest volume since April 2007
About Kathy Lien 236 Articles

Kathy Lien is an Internationally Published Author and Chief Strategist of DailyFX.com, one of the world’s most popular online websites for currency research. Her trading books include the highly acclaimed, Day Trading the Currency Market: Technical and Fundamental Strategies to Profit form Market Swings (2005, Wiley); High Probability Trading Setups for the Currency Market E-Book (2006, Investopedia); and Millionaire Traders: How Everyday People Are Beating Wall Street at Its Own Game (2007, Wiley). As Chief Currency Strategist at FXCM, Kathy is responsible for providing research and analysis for DailyFX, the research arm of FXCM. She also co-edits the BK Forex Advisor, an Investopedia.com Premium Service with Boris Schlossberg – one of the few investment advisory letters focusing strictly on the 2 Trillion/day FX market.

Kathy is also one of the authors of Investopedia’s Forex Education section and has written for Tradingmarkets.com, the Asia Times Online, Stocks & Commodities Magazine, MarketWatch, ActiveTrader Magazine, Currency Trader, Futures Magazine and SFO. She is frequently quoted by Bloomberg, Reuters, the Wall street Journal, and the International Herald Tribune and has appeared on CNN, CNBC, CBS and Bloomberg Radio. She has also hosted trader chats on EliteTrader, eSignal and FXStreet, sharing her expertise in both technical and fundamental analysis.

Visit: Kathy Lien

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