If one word can characterize the period covered by Euromoney’s latest survey of the global foreign exchange market it is volatility – which is ironic given that over the past 12 months actual FX market volatility was pretty much as low as it has ever been.
Before Russia’s invasion of Ukraine, the world was already being buffeted by a global supply-chain crisis, rising energy costs, the negative implications of Brexit, extreme weather events linked to climate change and a substantial shift in US foreign policy.
The impact on FX trading volumes of these events is difficult to assess given the lag in the publication of market data. The most recent Bank of England foreign exchange joint standing committee analysis noted that average daily reported UK FX turnover fell by 6% between April and October 2021, whereas the committee reported that North American FX volumes were up 2.4%
