Everything is Relative: FX Turnover Falls in October, But…

Semi-annual data from six of the seven local FX committees indicates that FX turnover fell off in October, compared to the surge witnessed the previous April, but is still likely to be at its second highest ever.

With the New York FX Committee data temporarily delayed, the numbers from the other committees in the UK, Singapore, Hong Kong, Tokyo, Canada and Australia offer a picture of an inevitable slowdown in most products, from April, although there was a bounce in some locations in FX swaps. Across all products, Canadian activity was up 9.6%, by contrast, the UK and Japan saw activity drop 4.8%, Singapore and Hong Kong by 17.7% and 14.5% respectively, and Australia by 11%.

A drop in activity from April was widely expected given the data already released by FX platforms and the boost to activity provided that month by the “Liberation Day” gyrations, however on a year-on-year basis the data is also mixed, with some centres seeing a drop and others an increase. One thing that is becoming clear from the data released is that traders seemed to have switched their attention from managing exchange rate risk in spot and options, and returned to FX swaps as a preferred product.

The UK’s FX Joint Standing Committee reports average daily turnover (ADV) of $3.85 trillion in October, up 19.7% on the previous year and the second highest ever reported in the centre. Growth was seen in all products with the exception of FX options, and the centre hit its highest turnover yet in FX swaps at $1.84 trillion, up an impressive 30.4% year-on-year.

The growth in swaps was very much down to Other Financial Institutions (OFIs) and Other Banks (OBs), although Reporting Dealers remain the largest segment at $810.7 billion per day (+4.3%). OBs traded $534.8.5 billion in October in the UK in swaps, up 46.1%, while the big drivers were OFIs were at $456.4 billion, up a massive 93.2% year-on-year. Non-Financial Institutions (NFIs) were also busier – again an indication of increased hedging – at $38 billion, this is up 18.1% from the previous year.

Spot volumes were just over $1 trillion per day, which is up 16.6% from the previous October, the major driver of the growth was the Other Banks sector at +25.3% ($207.1 billion per day), however the Reporting Dealers (+0.8% at $405 billion) and OFIs (+20.8% at $351.4 billion) remain the two largest counterparty segments. There was evidence that hedge fund and non-bank activity dropped off a little in October, the percentage of spot volume prime broked was 46.5%, down five points on April and down half a point year-on-year.

Outright forwards in the UK traded $486 billion per day, up 13.5%, driven largely by a 25.2% rise with OFIs, which at $84.4 billion are the largest counterparty segment; while in NDFs the growth was slightly quicker at 21% year-on-year, growth here was seen across all segments and OFI are again the largest at $26.7 billion.

With currency swaps ADV rising 18.1% to $38.1 billion, as noted, the only sector to see a decline was FX options. ADV was $207.6 billion, this is down 9.8% from October 2024, largely thanks to a decline between Reporting Dealers (-20.1% at $64.2 billion) and OFIs (-6.4% at $68.9 billion). NFIs used options more, trading $10.9 billion per day, up 23.3% year-on-year, while OBs traded $43.9 billion, up 7.7%.

Although activity declined quite sharply from April, Singapore remains the third busiest FX centre and has reported its fourth consecutive trillion-dollar-plus survey. ADV was just over $1.048 trillion, largely unchanged from October 2024, albeit thanks exclusively to a surge in FX swaps activity.

Spot volume in Singapore dropped 8.2% to $253.6 billion, while outright forwards (which included NDFs) was down 32% at $168 billion. Both were still, however, the third highest yet reported by the Singapore FX Market Committee. FX options volumes also dropped, by 10% to $61.5 billion, this is the lowest since October 2023 – currency swaps activity also declined, by 36.6% to $12.7 billion.

As noted, however, the drop in activity in these products was compensated for by a surge in FX swaps ADV where, like the UK, Singapore hit a new peak. ADV was $626.6 billion, up 19.5% year-on-year, it is also up 1% on April.

It was a similar picture in Hong Kong, where ADV was $755.3 billion, up 12.9% year-on-year. As was the case in Singapore, activity in Hong Kong dropped in spot and options, but while it rose in Swaps, it was also up in outright forwards.

Spot ADV was $125.8 billion, the lowest since October 2023 and down 5.7% year-on-year, while FX options volume dropped 10% to $24.2 billion (which is less than half that seen in April). Outright forwards ADV rose 25%, however, to $80.5 billion, while FX swaps volume was $520.5 billion, up 18.8%. Currency swaps volume dropped $1 billion to $4.2 billion per day.

USD/RMB is still the dominant market in Hong Kong at $198.6 billion, although activity was significantly down on April, it was up 2.8% year-on-year. For comparison, Singapore traded $100.4 billion per day in USD/RMB, and the UK $107.4 billion in USD/CNY.

While the picture recently for Japan has not been as positive as in other centres, in October Tokyo held its own, albeit the month was only the seventh busiest reported by the Tokyo FX Committee.

Overall ADV was $440 billion, up 10.2% year-on-year, with activity up across the board save for a small decline in FGX options. Spot ADV was $110.4 billion, which, while it is up 9.9% from the previous October, does not even register in the 20 busiest reports published in Tokyo. The same is almost the case in outright forwards, where October was actually the 20^th busiest month, activity rose by a modest 3.2% to $45.2 billion.

As was the case elsewhere, FX swaps volumes surged in Japan in October, hitting a new peak at $266.8 billion, this is up 11.9% year-on-year, April 2025 incidentally, was the previous high. As noted, FX options volumes drifted in Japan, to $12 billion per day from $12.4 billion in October 2024.

Canada stood out as the one centre to see a rise in activity from April, with outright forwards and FX swaps driving that growth. On a year-on-year basis, it was a familiar story with activity up in all products except for FX options (and currency swaps).

Overall ADV was $250.6 billion in Canada, the highest yet reported by the Canadian Foreign Exchange Committee, and up 11.9% year-on-year. Spot volumes were 4.2% higher at $27 billion per day, while outright forwards ADV was $25.4 billion, up 17.1%. FX swaps activity surged in Canada, almost exclusively thanks to trading between Reporting Dealers, hitting a new high at $179.3 billion, 14.3% up on the previous year. While there was a small uptick in activity with Other Dealers, Reporting Dealers saw activity grow by 44.2% year-on-year (and a massive 83% from April).

FX options volumes dropped from $5.4 billion in October 2024 to $5 billion in the latest survey, this is still the fourth highest reported by the CFEC, while currency swaps, which is a bigger market in Canada, saw ADV drop 2.8% to $13.9 billion – also the fourth highest yet reported.

Although Australia saw activity decline on a year-on-year basis, it was only slight, with an increase in outright forwards making up part of the decline in spot.
Overall ADV was $178.6 billion, a slight drop of 1.7% year-on-year, with declines in spot and FX options, as well as a minor slip in FX swaps activity. Spot ADV dropped 9.1% to $41.7 billion, with the decline spread across the four counterparty segments. FX options volumes, meanwhile, dropped below the $1 billion mark to $940 million per day, down 16.1% year-on-year, although local NFIs did nearly double activity to $421 million per day. This rise was more than compensated by a more than halving of activity with overseas financial institutions.

FX swaps activity in Australia was just 0.6% lower at $100.6 billion in the latest survey, much of the shift taking place with growth in trading with overseas financial institutions making up for a decline in volume with local Fis.

The good news story in the AFXC report was outright forwards, at $30 billion per day, this is up 6.6% year-on-year and is second only to April 2025. Growth was again spread across counterparty segments.

This story will be updated when the US data is published