Daily trading volume in the U.S. foreign exchange market grew 49%, to $192 billion, over the last three years, according to a survey released yesterday by the Federal Reserve Bank of New York.
That compares to the 120% jump in average daily volume during the previous three-year period, according to the New York Fed's 1989 survey.
Margaret L. Greene, a senior vice president at the New York Fed, said the results showed that growth in U.S. foreign exchange trading continued, "but at a more moderate pace."
The volume figures are adjusted to exclude double counting. The unadjusted average daily turnover in the U.S. currency markets was $241 billion.
The New York Fed survey uses trading data for the month of April from 175 banks and 12 nonbank financial institutions.
Ms. Greene said some of the growth in transactions may reflect the increase in the number of respondents.
The daily unadjusted turnover by the 130 institutions that responded to both the 1989 and 1992 surveys grew 20% over the last three years.
The survey showed that the dollar continues to dominate foreign exchange trading in the United States. Eighty-nine percent of the transactions in April involved the dollar, down from 96% in 1989.
The most popular transactions were dollar-German mark and dollar-yen, which accounted for 36% and 27% of trades respectively. Most nondollar transactions involved the German mark.
The dealers surveyed said 66% of their trades occurred between 8 a.m. and noon, 29% between noon and 4 p.m., and 5% between 4 p.m. and 8 a.m. the next day.
Ms. Greene said the survey results may have been biased lower by the Chicago flood in April, which limited trading at the exchanges, and by the Easter holidays. The majority of the institutions surveyed described the month's activity as below normal, she said.
The triennial survey by the New York Fed is part of a global effort coordinated by the Bank for International Settlements, and a number of foreign central banks also reported their results yesterday.
The Bank of England said daily volume in London totaled $303 billion, up 62% from the $187 billion total in 1989, and the Bank of Japan reported average daily transactions of $128 billion, up 10.8% over the last three years.