Mixed messages on FX volumes from UK and U.S. central bank surveys

By Anirban Nag and Richard Leong LONDON/NEW YORK (Reuters) - Foreign exchange trading out of the United Kingdom fell 9 percent in the year to April 2016, a semi-annual survey by the Bank of England showed on Monday, although volumes were slightly higher than shown in an October survey. Separately, a survey by the New York Federal Reserve released at the same time showed daily currency trading volumes in the United States averaged $893.2 billion in April 2016, up 1 percent from a year earlier and 10 percent higher from October 2015. The increase in U.S. trading volumes stemmed largely from a jump in swaps turnover, up 23 percent since the previous survey last October. Around two thirds of the world's biggest financial market flows through London and the report by the central banks precedes a keenly awaited triennial global report from the Bank of International Settlements due in September. Currency trading, a success story for banks in the past decade, has been hit over the past three years by changes in regulations aimed at getting banks to take less risk and a market-rigging scandal that culminated in dozens of traders being suspended or fired and banks being fined billions of dollars. Despite the drop in volumes from a year ago, the BoE said trading activity was up 5 percent in the six months to April 2016, driven mainly by renewed interest in the dollar/yen currency pair. Japan's central bank, in a surprise move in January, announced negative interest rates, pushing the dollar temporarily above 121 yen in early February. The dollar has since fallen to trade at 106.10 yen on Monday. The BoE said spot turnover fell 21 percent year-on-year, to $755 billion (£576.2 billion) per day, although it was up 4 percent in the six months to April 2016. Dollar/yen trading showed a 27 percent jump during that period to $361 billion a day. The BoE survey also showed turnover in sterling/dollar rose in the months before Britain's vote to leave the European Union while volumes in the Australian dollar and the Chinese yuan waned. Latest data shows currency volumes have picked up since Brexit. The surge in volatility of the pound and other major currencies around Britain's vote on June 23 - which trading platforms said more than doubled normal trading - pushed global volumes to $5.19 trillion in June from $4.61 trillion a day in May, according to settlement body CLS. (Additional reporting by Patrick Graham; Editing by Ruth Pitchford)