Volume data creates distorted view of liquidity

Publicly reported volume data in the foreign exchange market is often closely scrutinised for signs of industry trends, but analysis of that data for the past three years creates a somewhat distorted picture. Overall turnover as reported to the central banks has risen, at times steeply, but average daily volume on some of the major trading platforms has fallen, at times even more steeply.

Consider that in April 2011, average daily turnover in FX was recorded at $2.042 trillion in the UK, and