Currencies: a market that brews more than $ 7 trillion per day

The strong recovery of the global economy and the commodity boom led to renewed activity in currencies. Activity in the currency market set a record last April. In the 7 main financial centers (London, New York, Singapore, Hong Kong, Tokyo, Toronto, Sydney), which account for 80% of the market, daily volumes reached $ 5.926 billion, up 6% from the previous year. October 2019 record.

It was the City of London, with nearly $ 3 trillion a day, that drove the market up. It is three times larger than its rival New York. Its transactions jumped 16% over six months and 24% year on year. Since the great financial crisis of 2008, the daily volumes of the main places have doubled, according to data collected by the specialist foreign exchange magazine “The Full FX”.

More active stakeholders

Globally, including China, Korea, European markets and Switzerland, the $ 7 trillion mark has undoubtedly been largely crossed, above the previous record of $ 6,600 billion in the last triennial survey. in 2019 from the Bank for International Settlements. All market participants (banks, central banks, institutions, hedge funds, companies, individuals) have been more active on currencies this year. By 2020, the abrupt halt in growth and the decline in volatility had reduced currency trading.

Every day in April he traded on the foreign exchange markets the equivalent of two and a half times the gross domestic product of France. Although in strong development, the cryptocurrency market has a very negligible size next to that of currencies. In April, daily bitcoin volumes were less than $ 10 billion, or 0.15% of global forex activity.

Asia and renminbi

The strong economic recovery in Asia benefited the places of Singapore and Tokyo, which recorded record activity on currencies. Hong Kong, one of the main offshore markets for the Chinese currency, the renminbi, was near peak activity. The “commodity” currencies of exporting countries such as Australia and Canada have seen a strong resurgence of market interest. Central banks, which managed $ 12.570 billion in April according to the International Monetary Fund, have been active on currencies. Almost two-thirds plan to invest more in the renminbi, according to UBS’s second-quarter survey of 30 institutions.

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