Paris maintains its rankings in FX and rate derivatives markets



Foreign exchange and financial derivatives markets are concentrated in a few financial centres. Every three years, the Triennial Survey coordinated by the BIS and conducted by the Banque de France for France, provides an overview of the global landscape.To get more news about forex global rankings, you can visit wikifx.com official website.

London and the United States continue to top the rankings. Forex activity volumes there are respectively four and two times higher than in the next biggest financial centre (and respectively eight and five times higher for interest rate derivatives). However, activity volumes in London have levelled off in the forex market since 2019 and fallen sharply in interest rate derivatives, whereas rival European centres have seen double-digit growth and have gained market share in both activities.

Whereas Singapore and Hong Kong were jostling for 3rd place in the forex market in 2019, Singapore now ranks well ahead of Hong Kong. The Singapore dollar has expanded its market share from 1.8% to 2.4% of daily global trading volumes, and now stands level with the Hong Kong dollar which in turn has seen a sharp fall in market share. Nevertheless, Singapore continues to lag behind Hong Kong in the interest rate derivatives market.

In the rest of Asia, Japan remains one of the top five centres for forex transactions, but has fallen one place in the rankings for interest rate derivatives. China has remained stable versus 2019 in the forex market at 10th place. Both countries may have been negatively affected by the prolonged maintenance of public health restrictions during the pandemic.

There are also a few standout centres that have seen particularly strong improvements in their rankings: this is notably the case for Germany in interest rate derivatives and Canada in the forex market.
Global forex market activity has risen by 19% in the past three years (gross data adjusted for domestic double counting). This strong growth comes against a backdrop of rising global tensions and the appreciation of the US dollar since the summer of 2021. With a daily volume of USD 214 billion of transactions, compared with USD 167 billion in 2019, the Paris financial centre has expanded in line with global markets, while at the same time maintaining its No. 7 ranking, ahead of Germany.

In Paris, activity is highly concentrated among just a few players: four entities account for over 70% of total market activity. They have a strong presence in FX swaps, which is their preferred instrument for managing their cash reserves and hedging their forex risk. France stands out from the rest of the world in this respect: FX swaps are used in 71% of transactions in France compared with an average of 51% globally.

In France and the rest of the world, transaction maturities are becoming shorter: 80% have a maturity of up to one month compared with 77% in 2019 (global average of 84% in 2022). The rise in very short term transactions in part explains the growth in global activity, as contracts are mechanically renewed more often.

Brexit, which has led several French and foreign institutions to shift large account management activities out of London, has also helped to boost activity volumes in Paris by increasing the number of staff based in France.