The $4 trillion question: what explains FX growth since the 2007 survey?

BIS Quarterly Review  |  December 2010  | 
13 December 2010

Daily average foreign exchange market turnover reached $4 trillion in April 2010, 20% higher than in 2007. Growth owed largely to the increased trading activity of "other financial institutions", which contributed 85% of the higher turnover. Within this customer category, the growth is driven by high-frequency traders, banks trading as clients of the biggest dealers, and online trading by retail investors. Electronic trading has been instrumental to this increase, particularly algorithmic trading.

JEL classification: F31, G12, G15, C42, C82