Global Currency Trading Jumps 20% in 3 Years

1 September 2010 (PLANSPONSOREurope.com) Trading on the currency markets has grown by 20% in three years to £2.6 trillion a day. A three-year report into currency dealing shows rapid growth in trading, with the majority of business happening in London. 

Trade has jumped by 20% in the three years since the last survey was conducted by the Bank for International Settlements (BIS), which is sometimes called the "central bankers' bank". 

London outpaced the average, with turnover up by 25% over the period. 

Some $4 trillion (£2.6tn) changes hands around the world every day. 

The BBC's business editor, Robert Peston, has pointed out that the sum is equivalent to the entire output of the global economy being traded around once a fortnight on currency markets.  

Simon Derrick, the head of currency research at Bank of New York Mellon, said the growth in foreign exchange trading reflects a number of important recent trends in the real economy - including the economic strength of developing countries. 

He told the BBC: "If you look at the currencies where trading volumes have grown, they are typically commodity-backed - like the Australian dollar - or are the fast-growing emerging markets, such as China, Russia, Brazil and Turkey." 

The single-largest centre of foreign exchange dealing remains London, with 37% of global turnover taking place in the city.  

The survey's findings indicate that fears London may lose its place as a key financial centre are misplaced at present. 

The US, the second most important currency centre, does about half the amount of trading that takes place in London. 

Katherine Blackler
editors@plansponsoreurope.com