The 2016 Triennial Central Bank Survey of foreign exchange (FX) and over-the-counter (OTC) derivatives markets activity shows a decline in FX spot trading for the first time since 2001, even as activity in FX derivatives continued to increase.
Trading in FX markets averaged $5.1 trillion per day in April 2016. This is down from $5.4 trillion in April 2013, a month which had seen heightened activity in Japanese yen against the background of monetary policy developments at that time.
Spot trading fell to $1.7 trillion per day in April 2016 from $2.0 trillion in April 2013. In contrast, activity in FX swaps rose to $2.4 trillion per day in the latest survey, and in outright forwards to $700 billion per day.
The US dollar held its place as the dominant currency - it was on one side of 88% of all trades in April 2016. The euro remained the second most actively traded currency, but its share fell to 31% in April 2016, well below its peak of 39% in April 2010.
RMB's share of global trading doubles
Many emerging market currencies saw an increase in their share of global trading. The renminbi's share doubled to 4% as it became the world's eighth most actively traded currency. Renminbi turnover averaged $202 billion per day in April 2016.
For the first time since 1995, trading between reporting dealers increased as a share of global activity. From 39% in April 2013, the share of inter-dealer activity rose to 42% in April 2016. Banks other than reporting dealers accounted for a further 22%.
Insurance companies, pension funds and other institutional investors were the third largest group of counterparties in FX markets, at 16%.
The 2016 Triennial Survey shows a continuation of the trend towards greater concentration of FX trading in the largest financial centres. In April 2016, sales desks in five markets - the United Kingdom, the United States, Singapore, Hong Kong SAR and Japan - intermediated 77% of foreign exchange trading, up from 75% in April 2013 and 71% in April 2010.