UPDATE 2-FX volume in US, UK drops in October, but up in Asia-survey

Tue Jan 29, 2013 12:57pm EST
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NEW YORK Jan 29 (Reuters) - Daily currency volume in the world's largest foreign exchange centers posted mixed results with drops in the United States, United Kingdom and Canada, but gains in Japan, Singapore, and Australia, a biannual survey from major central banks released on Tuesday showed.

A euro zone debt crisis which drove down volatility and low interest rate regimes around the world have reduced forex transactions in the Western Hemisphere, analysts said, although these factors didn't seem to affect turnover in the Asia-Pacific region.

In North America, total volume was $793.5 billion in October 2012, down 7.7 percent from April. That was also 18.8 percent lower than a year earlier. The New York Federal Reserve-sponsored Foreign Exchange Committee (FXC) said the October volume reflects disruptions related to Superstorm Sandy.

Data on North American volume came from 25 active financial institutions in the country.

Spot transactions posted the sharpest decline among all forex instruments in the U.S., sliding 32.7 percent year-on-year to $381.1 billion. Only forward transactions showed an increase, rising 6.1 percent to $143.6 billion in October.

The fall in volume was also most pronounced for transactions involving the euro versus the U.S. dollar, the FXC said. Declines in deals on euro/dollar accounted for roughly two-thirds of the overall decrease in daily turnover.

The euro for most of last year traded within very narrow ranges as the European Central Bank undertook measures to combat the region's debt crisis. That resulted in lower volatility and limited profit opportunities.

In the UK, the average daily turnover fell 5 percent in October from the April level to hit its lowest since October 2010, a Bank of England survey of 30 financial institutions showed.   Continued...