April 20, 2021

Britain retains lead in currency trading despite Brexit vote

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From WN

Britain has extended its lead in the global currency trading business in the two years since it voted to leave the European Union, in another sign London is likely to continue to be one of the world’s top two financial centers even after Brexit, Reuters reports.

Leaving the European Union was supposed to deal a crippling blow to London’s position in global finance, prompting a mass exodus of jobs and business. But with eight months to go, London has tightened rather than weakened its grip on foreign exchange trading, a Reuters analysis shows.

Foreign exchange – the largest and most interconnected of global markets, used by everyone from global airlines to money managers in transactions worth trillions of dollars a day – is the crowning jewel of London’s financial services industry.

Reuters’ analysis, based on surveys released by central banks in the five biggest trading centers, shows forex trading volumes in Britain had grown by 23 percent to a record daily average of $2.7 trillion (£2.1 trillion) in April compared with April 2016.

That was double the pace of its nearest rival, the United States, which was up 11 percent to $994 billion, mostly out of New York.

That means about two-fifths of all trades are handled in Britain, nearly all of them in London – a daily volume almost equivalent to the annual economic output of the United Kingdom.

The next three biggest markets are Singapore, which fell by 5 percent to $523 billion; Hong Kong, which grew 10 percent to $482 billion; and Japan, which increased by 2 percent to $415 billion.

London has dominated the foreign exchange market for nearly half a century.

Investment banks earned $4.2 billion in revenues from foreign exchange business globally in the first quarter of 2018, about 12.5 percent of all revenues in their global markets divisions, according to data from industry analytics firm Coalition.

WN.com, Jim Berrie

For more on this story and video go to: https://article.wn.com/view/2018/08/21/britain_retains_lead_in_global_currency_trading_despite_brex/

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