Hedge Funds’ Currency Trading Plunges 29 Percent in Spot Market

  • Trading volume average $200 billion a day in April 2016
  • Proprietary traders’ share of global market falls to 8%

Currency Market Averages $5.1 Trillion Daily Volume

Hedge funds and proprietary traders reduced currency trading in the spot market by 29 percent during the past three years, according to the Bank for International Settlements.

The traders acted as counterparties for an average $200 billion a day of spot transactions in April 2016, plunging from $282 billion reported for the same month in 2013, the BIS said Thursday in its latest triennial survey of the currency market. Turnover in outright forwards and foreign exchange swaps fell by 29 percent and 37 percent, respectively.

The decline in activity from hedge funds and proprietary traders reduced their share of global currency trading to 8 percent, down from 11 percent three years earlier, BIS said.

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