LONDON, Aug 10 — Turnover in London, the world’s biggest currency trading hub, declined 16 per cent in the six months to April, led by a 30 per cent slump in pound trading, the Bank of England said today.
All major currency pairs saw average daily turnover tumble compared with the last survey in October 2019, according to a survey by the Foreign Exchange Joint Standing Committee, which is chaired by the Bank of England.
The survey period encompasses the peak of the coronavirus-induced panic in March when asset price volatility surged and liquidity shrank across most markets, including currency trading.
Pound trading, which had hit a record back in October 2019, was the worst hit, with average daily turnover for dollar-sterling down by US$138 billion (or 32 per cent) while euro-sterling turnover slipped by US$24.7 billion (-31 per cent).
That decline pushed dollar-sterling off its position as the second-most traded currency pair, replaced by dollar-yen. Euro-dollar remained the most traded.
But all other instruments fell compared to the previous period: spot transactions, outright forwards, non-deliverable forwards, foreign exchange swaps, currency swaps and foreign exchange options, the BOE said.
For an interactive version of this chart, click here.
Foreign exchange swaps and currency swaps saw the largest relative falls, with daily turnover down 20 per cent and 37 per cent respectively.
Spot transactions declined 10 per cent to US$677 billion in the six months to April 2020, from US$754 billion in the six months to October 2019.
The US dollar, Australian and New Zealand dollars, Canadian dollar, and Swedish and Norwegian crowns took smaller percentage shares of the average daily turnover.
The euro, Japanese yen, Swiss franc and Chinese yuan took large shares, compared to the previous period. — Reuters
