After the expected fall in volumes in the first quarter of 2009, the FX market has reassessed the risks and volumes are growing once again. The latest data show the market is in good health.
In New York, the Foreign Exchange Committee’s 11th survey of North American volume found that the total average daily turnover in over-the-counter instruments, including spot transactions, outright forwards, FX swaps and options, totalled $675 billion during October 2009, an impressive increase of 28.1% on April 2009. This level of activity is almost back to those of October 2007 and April 2008. It suggests that activity may soon be back to where it was in October 2008. Turnover then was $762 billion.
Encouragingly, the FXC says the increased volume was "broad-based, occurring across all instrument types, counterparty types and execution methods, as well as across most currency pairs." Compared with the figures reported six months ago, average daily turnover in spot rose 32% to $388 billion; outright forwards 16% to $85.5 billion; swaps 24% to $176.3 billion; and option volumes rose 41% to $25.1 billion because of markedly increased liquidity and greater demand at lower volatility levels.
London numbers
In London, the Foreign Exchange Joint Standing Committee reports less dramatic increases.