Do BIS volumes soar past the trend?

Foreign exchange sales desks may have taken solace in the Bank for International Settlements’ (BIS) recent report showing a surge in FX turnover this year. With average daily volumes exceeding $9 trillion a day, this new representation of the status quo marks a milestone for the market.

The desks may be less enthusiastic further down the road, though, as the 2025 Triennial Central Bank survey – an important benchmark of global FX turnover that collects data from more than 1,100 banks, dealers and national aggregates every three years during the month of April – may warrant a caveat this year.

The latest edition captured a month of extraordinary trading volume in response to the spike in volatility caused by US president Donald Trump’s renewed war path on tariffs and global trade.

The BIS survey states that turnover in over-the-counter FX markets reached $9.6 trillion per day on a net basis – a 28% increase compared with the previous survey in 2022. The growth was driven largely by FX spot and outright forwards volumes, which increased by 42% and 60%, respectively. Additionally, volumes of FX options doubled to reach 7% of total FX turnover.

Meanwhile, the share of FX swaps – the largest instrument by turnover – fell from 51% to 42%.

April this year was anything but typical

The report, however, notes that the data was collected amid elevated FX volatility and a surge of activity following the Trump administration’s trade policy announcements. Yet despite this transparency, questions on efficacy remain.

The reported explosion in global FX activity, as it relates to the true underlying market trends the survey aims to uncover, raises questions around how much of this growth provides solid evidence of a shift in activities rather than being the result of event-based market volatility.

The study is meant to be taken as a snapshot of the FX market and identifies current trends, market player roles, liquidity and infrastructure in order to monitor and analyse the market’s evolution over time.

For some market participants, the survey is a tool used to track shifts in trading behaviour, product evolution and liquidity concentration. The design of examining a single month as a timestamp for the market over a three-year period is clearly an asset for a trader, yet at what point does it become a liability if the data is not a true representation?

April this year was anything but typical. On April 2, the Trump administration announced its long-proposed “reciprocal” tariffs, sparking a flurry of macroeconomic and trade discourse that ultimately moved markets for the remainder of the month, stoking heightened activity.

As a result of this volume bump on top of potential natural growth trends, the study would have market participants believe that trading in OTC FX markets is much higher than it was three years previously.

But it is also likely that the rush of announcements impacting global trade on a macro scale may have instead prompted behaviour outside of traditional market trend growth.

How does a market participant looking at the data differentiate between increased hedging activity among corporates needing to adjust ratios on foreign and domestic cash flows, asset managers increasing hedge protection on dollar exposures, as well as fast money or speculative traders pouring into volatility trades, as opposed to a more genuine, long-term trend of an expansion of trading?

The FX options volumes reported in the survey also give pause for thought.

The study showed that April volumes rocketed from $303 billion in 2022 to $634 billion in 2025. While there has been a general uptick in the 15 years that the BIS has been collecting data on the FX market, that is assuredly an outsized jump between studies.

As a result, it is difficult to identify what is natural growth rather than a response to market volatility.

What conclusions can be drawn, for instance, should options products decrease to $350 billion in average daily volume in 2028’s study? Would the market for FX options products have shrunk, or was 2025 an outlier in the steady progression from $200 billion to $300 billion?

So, while FX market-makers and dealers can generally explain that the market has expanded over time, they might still struggle to separate wider market trends from April’s tariff turmoil.

There is clear logic behind the BIS triennial review’s premise of keeping the survey period constant. Yet, it does makes it difficult to value the report’s volume statistics during a month that appears to be an outlier on a level playing field.

Editing by Joe Parsons