WSJ: Official data shows global FX trading volumes rising in October 2013

Retail investors and hedge funds show rising interest in forex trading

According to data sets provided by global central banks in Australia, Japan, Singapore, the UK, US and Canada that cover about 75% of global FX trading flows about $3.87 trillion have been shaking hands on the forex market every day. That is the report that the Wall Street Journal has released today about the industry’s official performance. Mentioned central banks’ data supposedly covers about 75% of global FX transactions.

When compared to last year’s number, we are observing a year on year rise of about 7.5% from $3.60 trillion per day. If we compare these numbers to most of the ECNs and retail brokerages which release volumes data it seems that Marc Chandler from Brown Brothers Harriman is correct in extrapolating that retail traders and hedge funds volumes are growing more rapidly than the rest of the market.

Increased volumes are partially explained by increased central banks stimulus policies by the Bank of Japan and the Federal Reserve that has just recently started pulling back accommodation from the bond markets triggering a huge outflow from emerging market currencies in the past weeks. Volumes were still lower than the latest snapshot taken by central banks in the month of April, just around the time the Bank of Japan kicked off its ultra-loose monetary action.

Growth in the UK has been faster than in the rest of the world with London forex flows growing close to 11% year on year from $2.017 trillion in October 2012 to $2.234 trillion last year. The article states that according to data compiled by the Parker Global Currency Managers Index increased trading volumes did not lead to increased profitability – on the contrary the average fund lost 4.71% as of November.

Following is a link to the full article by the Wall Street Journal.

For more on the global Forex industry see the LeapRate-Dow Jones Forex Industry Report.

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