Surge in currency deals
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Your support makes all the difference.LONDON has clinched its dominant position as a world foreign exchange centre, with average daily currency turnover leaping 62 per cent since 1989 to USdollars 303bn ( pounds 178bn).
Foreign exchange turnover in New York, which ranks in second place, increased by 48 per cent to dollars 192bn, and volumes in Tokyo rose by 11 per cent to dollars 128bn over the three-year period.
A Bank of England foreign exchange survey conducted in April produced the fresh data on the huge volumes of money flowing around foreign exchange markets. Central banks in 26 financial centres also took April surveys and published them yesterday.
Bank of England officials estimated that, worldwide, daily average foreign exchange volumes were now 50 per cent up on the 1989 total of dollars 640bn, putting them at nearly dollars 1,000bn.
The growth in daily volumes since 1989 may reflect the growing sophistication of fund managers willing to use the markets to hedge risk, they said.
National Westminster Bank said separately yesterday that its own foreign exchange trading volume was up 50 per cent last week amid the frenzied currency market activity, indicating that global daily forex volume in turbulent times will be even higher than the average daily dollars 1,000bn.
The survey of 365 banks, financial institutions and brokers said that of the total dollars 303bn changing hands in London's foreign currency markets daily, dollars 147bn was in spot transactions for immediate delivery, up 24 per cent in value since 1989.
Forward deals, bought and sold for future delivery, averaged dollars 146bn daily, up 125 per cent in value, of which 90 per cent were swaps. Futures and options trading grew by 5 per cent.
The bulk of activity was in sterling/US dollars (19 per cent) and US dollars/German marks (23 per cent), but their combined share has declined as non-dollar currency trading has grown.
The proportion of daily activity accounted for by inter-bank business declined by 9 per cent, while the proportion of business with non-financial customers and other financial institutions rose.
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