UPDATE 3-North American, London FX volume slides in October - surveys

(Recasts; adds context about market manipulation, regulation)
By Anirban Nag and Gertrude Chavez-Dreyfuss
LONDON/NEW YORK, Jan 25 (Reuters) - Daily currency volumes
in London and North America contracted in October compared with
a year ago, hammered by fallout from a raft of market
manipulation scandals and banks' unwillingness to take on more
risk, according to semi-annual surveys by the U.S. and UK
central banks released on Monday.
The surveys followed previous studies by the Bank of England
and New York Federal Reserve's Foreign Exchange Committee
showing volume shrank in both London and North America in April
2015.
"The regulatory environment is not helping. Regulatory
changes are having an effect on liquidity and hence volumes and
flows," said Jeremy Stretch, head of currency strategy at CIBC
World Markets in London.
Daily volume in London was down 21 percent in October from
the same period in 2014 to $2.15 trillion - the lowest turnover
since October 2012, the BoE survey showed.
Volumes were down 13 percent in the six months to October
2015, as volatility in the currency markets waned in the second
half of the year after witnessing a jump early in 2015 as the
Swiss National Bank suddenly removed a cap on the Swiss franc
against the euro in January.
In North America, average daily turnover totaled $809.3
billion in October 2015, down 26 percent from a year earlier,
and 8 percent lower than the average volume taken April 2015
survey, the NY Fed's FX committee data showed.
The NY Fed said the decline in forex volume was primarily
driven by the spot market's turnover, which fell 12 percent
since the April 2015 survey.
The decrease in volume in North America occurred across most
currency pairs, but was most significant in the euro/dollar
EUR= and sterling/dollar GBP= pairs, accounting for 34
percent and 15 percent of the total fall, respectively.
In London, the survey showed turnover in euro/dollar fell 17
percent in the six months to October 2015 to $640.1 billion a
day.
The divergence between monetary policy in the United States
and other major economies, along with political risk stemming
from the Greek debt crisis, bolstered a recovery in trading in
the euro over the past two years or so.
But that trend appears to be flagging, while volumes in the
Australian dollar and the Chinese yuan have picked up.
Beijing shocked global markets in August last year by
devaluing the yuan CNH= CNY= , leading to a surge in trading
in the currency and in the Australian dollar AUD=D4 , which is
often used as a liquid proxy for China.
Turnover in the Australian dollar rose 8 percent. Volume was
up 3 percent in the Chinese yuan in the six months to October.
Daily traded volumes in the U.S. dollar/offshore Chinese yuan
CNH= were at $44.4 billion, up from 43 billion in the six
months to April 2015.