Q2 Daily Average Forex Trading Volume Hits $65.59 Billion...All-Time High

Increase in Foreign Exchange Transaction Volume Amid Expanding Exchange Rate Volatility

[Image source=Yonhap News]

Due to the Federal Reserve's (Fed) tightening measures and the impact of the Ukraine crisis, the average daily foreign exchange trading volume in the second quarter of this year once again recorded an all-time high.

According to the foreign exchange trading trends of foreign exchange banks announced by the Bank of Korea on the 25th, the average daily foreign exchange trading volume (spot exchange and foreign exchange derivatives trading) of foreign exchange banks in the second quarter was $65.59 billion.

This is an increase of $40 million (0.1%) compared to the previous quarter, the first quarter of this year ($65.55 billion), marking the highest level since the statistics revision in 2008.

The Bank of Korea explained, "Although the scale of exports and imports shrank, the increased volatility of the exchange rate influenced the rise in foreign exchange trading volume." The daily volatility of the won-dollar exchange rate increased from 0.35% in the first quarter to 0.46% in the second quarter.

By product, the spot exchange trading volume was $25.05 billion, up $900 million (0.4%) from the previous quarter, while foreign exchange derivatives trading volume was $40.54 billion, down $50 million (-0.1%).

By bank type, domestic banks' trading volume was $28.03 billion, up $470 million (1.7%) from the previous quarter, whereas foreign bank branches' trading volume was $37.57 billion, down $420 million (-1.1%).

(Data provided by Bank of Korea)