Explosive Growth in Foreign Exchange Market Volume Continued in 2007-2010

September 1, 2010

The Bank for International Settlements in Basle, Switzerland coordinates a triennial survey of global currency market transaction volume.  A survey taken this spring revealed daily turnover of $3.981 trillion.  Such was 19.8% greater than volume three years earlier, 105.8% bigger than six years ago, and 222.6% larger than in the 2001.  The only three year period to show a drop in world FX turnover was between 1998 and 2001 when the creation of the euro replaced eleven currencies with just one.

U.S. forex market turnover this past April of $876 billion per day was up from $709 billion per day in the 2007 survey, $508 billion per day in the 2004 survey and $287 billion per day some five months before the 9-11 attacks in 2001.  The U.S. began measuring the volume of currency market transactions almost more than a decade prior to the organized global tallies.  The first in a series of triennial U.S. surveys in April 1977 found daily turnover to be $5.3 billion.  One earlier survey in 1969, that is two years before the first dollar devaluation and four years prior to the second devaluation and end of fixed exchange rate parities, put monthly U.S. currency market volume at $17 billion or a daily turnover of $850 million.  Over the 41 years since 1969, U.S. turnover has soared at an annualized rate of 18.4%.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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