Average daily volumes of trading in the currency markets fell back from record highs in the six months to April, digesting a shock decision by the Swiss National Bank to jettison a cap on the franc, a regular survey by the Bank of England showed. The drop following a handful of record days in December and January when trading was around twice the $5 trillion daily average bodes ill for banks who rely on higher trading volumes in fixed income, currencies and commodities to bolster profits.
January was a turbulent month for the currency market, with the surprise move by the SNB to scrap its more-than three-year-old franc cap against the euro driving the biggest day's trading ever by some measures. But volumes have since tailed off, with turnover in the global currency market and the Swiss franc dropping in subsequent months. Daily trading in London, the world's main foreign exchange centre, was 8 percent lower at $2.48 trillion a day, the Bank of England's survey showed, including a 13 percent drop in daily spot volumes to $973 billion a day in the six months to April. The BoE said despite a broad decline in overall turnover, activity in the Chinese yuan picked up. That comes as Beijing ramps up its efforts to internationalise the currency, also known as the renminbi.
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