Daily currency trading volumes rise to $4.96 trillion in April - CLS

LONDON, May 17 (Reuters) - Global currency trading volumes
rose to just shy of $5 trillion a day in April as volatility
picked up after the Bank of Japan surprised many by keeping
monetary policy unchanged, data from settlement company CLS
showed on Tuesday.
Instructions to CLS account for more than 90 percent of the
world's single biggest financial market. They showed volumes
rose to $4.96 trillion a day in April, up from $4.69 trillion in
March and $4.64 trillion in April 2015.
The April volumes will be highlighted in the Bank of
International Settlement's triennial survey of the foreign
exchange market and which will be released in September. The
triennial survey is the most comprehensive one undertaken and
activity in April will give a guage of the market size.
Trends in the currency options market show that the cost of
hedging against sharp currency swings rose sharply in April
after the BOJ meeting in early April. The BOJ's steady stance
along with a decline in overall risk sentiment in global markets
drove many speculators and investors to cut favourable dollar
positions and buy the safe-haven yen. JPY=
That saw overall volatility in currency markets climb
.DBCVIX , before easing back again towards the end of the month
JPY1MO= . Higher volatility shores up volumes in currency
markets, boding well for banks and traders who thrive on sharp
moves to make money.
Nevertheless, volumes in the foreign exchange market, a
success story for banks over the past decade, have faded from
peaks hit around the start of last year as lenders cut back on
their own trading and the leverage they give fund clients to
play with.
Volumes have been below $5 trillion a day for most of the
past year and spot volumes on currency trading platforms run by
Thomson Reuters TRI.TO and ICAP IAP.L fell in April.
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