The UK's foreign exchange (Forex) market experienced a decrease in average daily trading volume (ADTV) in October 2024, according to the latest semi-annual survey by the Foreign Exchange Joint Standing Committee (FXJSC). The ADTV fell to $3.2 trillion, marking a 5% decline from April levels. Despite the dip, the market maintained its position as the world's largest currency trading hub, accounting for nearly half of all global transactions.
The decline aligns with historical seasonal patterns, with October typically showing lower activity compared to April. However, the market saw year-over-year growth of 10%, indicating continued expansion. FX swaps remained the dominant trading activity, accounting for 44% of total volume, while spot transactions represented 28% of trades.
The euro-dollar remained the most actively traded currency pair, with daily turnover of $797 billion, representing a quarter of all trading activity. The market share of the top three traded currency pairs, EUR/USD, GBP/USD, and USD/JPY, remained consistent with previous surveys.
The FXJSC survey highlights that overall FX trading volume has nearly doubled since October 2008, growing from $1.7 trillion to $3.2 trillion daily. The data collected by the FXJSC is similar to the Bank of International Settlements (BIS) triennial survey, but the FXJSC gathers it more frequently.
The latest BIS survey, released in October 2022, showed that the ADVT in the UK foreign exchange market reached $3,755 billion, an increase from $3,576 billion per day recorded in April 2019. The UK remains the largest hub for foreign exchange activity, accounting for 38.1% of global turnover. While this marks a decline from 43.2% in April 2019, the 2022 survey indicates that the UK's global market share remains generally consistent with levels seen in previous surveys.
Despite London's continued leadership, its share in the global FX trading has been declining in favor of competitors, particularly after Brexit. The U.S. market is expanding rapidly, while other locations in Germany and France are starting to take over London's role in Europe. The latest BIS survey, expected to be published this year, should provide further insight into the UK's position in the global FX ecosystem.