Every three years, the Bank for International Settlements (BIS) in Basel, Switzerland, surveys the world’s central banks to measure trading activity in the foreign exchange markets. The data gathered in each Survey are published in a document titled Triennial Central Bank Survey. These triennial surveys have been conducted since 1995. This year is a Triennial Survey year.
Each Survey is published in two parts: a Preliminary report, typically released in September of the survey year, and a Final report, typically released in December of the survey year.
In each Triennial Central Bank Survey:
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the Preliminary report details average daily turnover in the foreign exchange (FX) market. FX activity around the world is monitored over a 30-day period (during the month of April) in the survey year. The data gathered during this period are used to compute daily averages in various categories of turnover.
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the Final report details amounts outstanding in the OTC derivatives markets. This is a “snapshot” of the FX derivatives market, taken at one point in time (on June 30) in the survey year.
The data of interest to us, as retail forex traders, are the turnover data gathered in April and published in the Preliminary report. Turnover is the term used by the BIS to denote transaction volume. This volume is measured and reported in several ways: turnover in specific currencies, turnover in specific currency pairs, turnover among specific counterparties, turnover by country, and turnover in the overall (world) FX market.
The Preliminary portion of the 2022 Triennial Central Bank Survey was delayed until October 27 this year. It has now been released, giving us our first look in three years at the size and activity of the overall (worldwide) foreign exhange market.
Here are Highlights from that report (emphasis added):
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Trading in OTC FX markets reached $7.5 trillion per day in April 2022 (“net-net” basis, all FX instruments), up 14% from $6.6 trillion three years earlier.
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Turnover of FX swaps accounted for 51% of global turnover, up from 49% in 2019. The share of spot trades fell to 28% from 30% in 2019, and that of outright forwards remained unchanged at 15%.
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Overall, inter-dealer trading, ie trading among “reporting dealers”, reached $3.5 trillion or 46% of global turnover in April 2022, a higher share than in previous Surveys. Trading with “other financial institutions” saw modest growth and accounted for 48% of global turnover (down from 55% in 2019).
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The US dollar was on one side of 88% of all trades (unchanged from 2019). The share for the euro decreased marginally to 31% (from 32% in 2019), and those for the Japanese yen and the pound sterling remained unchanged at 17% and 13%, respectively. The renminbi’s share rose to 7%, making it the fifth most traded currency in 2022 (up from eighth place in 2019 with a 4% share).
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Trading at sales desks in five jurisdictions – the United Kingdom, the United States, Hong Kong SAR, Singapore and Japan – amounted to 78% of all FX trading (“net-gross” basis). Trading activity in the United States and Singapore grew by more than the global average.
For a more detailed summary of data from the Preliminary Report, click this LINK.
Finally, here is a LINK to the entire 2022 Triennial Central Bank Survey Preliminary Report (.pdf).