The City UK's latest estimates show that the UK accounted for 37% of global foreign exchange trading in October 2012. These estimates are based on individual surveys of foreign exchange activity also released today by central banks in the UK, US, Japan, Australia, Canada and Singapore.

The UK's share of global foreign exchange trading was up slightly compared to the previous year, and well ahead of the US (17% down from over 19% a year earlier), Japan and Singapore (with 6% each). London accounted for the bulk of the UK's daily turnover averaging $1,919bn in October 2012.

They estimate that average daily global turnover in traditional foreign exchange market transactions (spot transactions, outright forwards and FX swaps) totalled $4.4 trillion in October 2012, down 7% on on the previous year. Despite the fall over the past year the volume of foreign exchange trading is on a long term upward trend, a result of the growing importance of foreign exchange as an asset class, the proliferation of electronic trading platforms which is making it easier to access this market, and an increase in global fund management assets.

Foreign exchange market average daily turnover

Sources: Bank for International Settlements Triennial FX Survey (April 2010); TheCityUK estimates based on FXJSC, FXC, SFEMC, TFEMC data (October 2011, October 2012).

EU Gives Green Light for Financial Transactions Tax
A group of 11 European Union (EU) countries have given the go-ahead to proceed with the introduction of a financial transactions tax (FTT) in 2014, despite the opposition of other EU members including the UK.

Specialist tax advisory firms warn that the FTT spelled uncertainty for major companies. Plus there will be significant variation between the financial centres in Europe with Frankfurt, Paris and Madrid being affected by the tax, with other centres of trading, including London, seemingly gaining a significant advantage through their not signing up to the agreement.