LONDON – Britain’s stronghold on global currency trading is weakening, allowing the United States, Singapore and European hubs to snare market share, the Bank for International Settlements (BIS) said.

The latest figures from BIS’ foreign exchange market survey, the industry’s benchmark, showed on Thursday that London’s share of the global market dropped to 38 per cent from 43 per cent in 2019.

The US is second at 19 per cent, up from 17 per cent previously. 

Singapore, where the authorities launched a push to grab a larger share of the market in 2019 by offering incentives and building infrastructure, has seen its share jump to 9.4 per cent from 7.7 per cent.

Conversely, activity in Hong Kong and Japan fell to 7 per cent and 4 per cent respectively.

London has been the world’s currency hub since the 1980s, its importance growing along with its role in global finance in part because of its location between Asian and US time zones. But since Britain’s decision to exit the European Union in 2016, banks have been moving trading floors to Paris and Frankfurt.

Germany and France have seen volumes edge higher, with the former accounting for 1.9 per cent of overall daily trade and the latter 2.2 per cent. This process could accelerate as EU regulators step up pressure on lenders to increase staffing within the bloc. 

BIS, which collects a snapshot of the US$7.5 trillion (S$10.6 trillion)-a-day global market every three years during the month of April, will analyse its results in a separate publication in December. 

The world’s five largest currency-trading hubs jointly account for 78 per cent of activity, keeping the global currency market concentrated. BLOOMBERG