Main findings of the foreign exchange sector from the latest triennial survey of central banks

The 2019 triennial survey of central banks is one of the most comprehensive reports on the amount of turnover in the foreign exchange markets. The first report was in 1986. Their last report was in 2019 and the next is due in 2022 (as the name suggests), as long as there are no COVID-19 delays. The report claims to take data from central banks and other key FX players in 53 different jurisdictions as well as 1,300 banks and brokers in those jurisdictions.

Here are some of the report’s highlights worth considering:

  1. The US dollar was traded on one side of 88% of transactions. The USD is not called the dollar king for nothing, the world reserve currency and the world trade currency.

  2. 25% of global turnover came from emerging market economies.

  3. Sales offices in five countries accounted for 79% of all foreign exchange transactions. These countries were the United Kingdom, the United States and Hong Kong SAR, Singapore and Japan, with trade in the United Kingdom and Hong Kong SAR increasing more than the world average.

Below is the chart showing the most traded currencies and pairs.

The most traded currency pairs are (on the left side of the chart below):

  • EURUSD

  • USDJPY

  • GBPUSD

  • AUDUSD

  • USDCAD

The most traded currencies are (note that two currencies being used, the sum of the individual stocks will add up to 200%):

  • 88.3%

  • 32.23% euros

  • JPY 16.8%

  • 12.8% pounds sterling

  • AUD 6.8%

The Chinese currency continues to grow in overall volume, being the 8th most traded currency in the world at 4.3%.

Below is the foreign exchange market turnover by instrument. Most currency transactions involve currency swaps, about 1/2 and about 1/3 in the spot market.

Graphic


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