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2w ago

BIS Survey Finds Record $9.6 Trillion in Daily FX Trading as Tariff Shock Fuels Hedging

The BIS links the jump to April’s U.S. tariff shock that spurred heavy dollar-hedging in forwards.

U.S. dollar notes are seen in this November 7, 2016 picture illustration. Picture taken November 7. REUTERS/Dado Ruvic/Illustration
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Overview

  • Average daily FX turnover in April reached $9.6 trillion, a 28% increase from April 2022, based on data from more than 1,100 banks in 52 jurisdictions.
  • The U.S. dollar remained the most traded currency even as its depreciation prompted asset managers to sell dollar forwards to curb portfolio losses.
  • Currency shares shifted, with China’s yuan rising to 8.5% of trades, the euro slipping to just under 29%, and sterling falling to 10.2%.
  • London consolidated its lead as the top FX hub, with Britain, the United States, Singapore and Hong Kong together accounting for about 75% of activity.
  • OTC interest-rate derivatives turnover jumped to $7.9 trillion, driven by a near-doubling in euro-denominated contracts and a surge in yen instruments following Japan’s move away from negative rates.