Last month the BIS released its triennial survey charting FX volumes acrosscurrencies, counterparties and products. Although the numbers are subject tosome methodological issues (the survey is compiled during a single month oftrading, in this case April 2013, meaning that medium term market trends canskew results), one clear conclusion is that currency volumes have weatheredlackluster global growth, market uncertainty and the increasing pace of globalfinancial regulation well. This is particularly striking when compared to theaverage size of global current accounts, a proxy for capital flows. FX volumeshave instead closely tracked nominal GDP, suggesting that liquidity, ratherthan cross border transactions per se, is the key driver of volumes.
Read the full report: FX Daily
Deutsche Bank