FX trading hits daily record $9.6 trillion as Trump’s tariffs trigger frenzy in April
Global FX trading hit a record in April 2025, with daily turnover smashing through $9.6 trillion, more than 25% above 2022’s figures, according to the Bank for International Settlements (BIS).
The trigger was president Donald Trump’s “Liberation Day” tariffs, dropped on April 2, which shook up currency markets worldwide and kicked off the largest shift in foreign-exchange activity seen in years.
The BIS said in its quarterly review that the US dollar collapsed sharply in response, losing its safe-haven shine and causing $1.5 trillion in OTC trades per day that month alone.”The FX market appeared to act as a shock absorber during the turbulence in April 2025,” BIS researchers Wenqian Huang, Ingomar Krohn, and Vladyslav Sushko wrote.
The connection between the greenback and risky assets broke down entirely. Investors had to move fast. Many raced to hedge their USD positions as volatility spiked hard.
Trump tariffs trigger worst dollar performance in 50 years
Trump’s tariffs set off a full-on scramble. The dollar tanked the day the measures were announced. And it didn’t bounce back. A JPMorgan index of currency volatility shot up to its highest point in two years that same month.
Traders with low hedge ratios suddenly found themselves badly exposed, especially after two years of rising global rates had already made hedging more expensive.
“The need to adjust hedges of US dollar positions was especially acute since many investors entered the month with relatively low hedge ratios,” BIS said.
Higher interest rates from 2022 to 2023 had pushed up hedging costs across the board. As the dollar kept slipping, many scrambled to protect against more downside. Some moved their money elsewhere altogether.
The Bloomberg Dollar Spot Index dropped more than 7% in the first half of 2025, marking the worst H1 for the dollar in five decades. It bounced slightly in the second half, but the damage was done.
This crash spiked demand for forwards and options. Trading volumes for those products soared. But there was no panic over dollar funding. The BIS said FX swaps rose only modestly since 2022, showing no signs of stress on the funding side.
BIS survey confirms global scale of trading boom
The 2025 data came from the BIS’s triennial survey, the deepest dive into global FX trading available.
Over 1,100 financial firms from across the world sent in their data. The BIS had already published a preliminary version in September, but the final update confirms how fast and how far the market moved after April’s shocks.
Stock markets across Asia showed mixed reactions, as Hong Kong’s Hang Seng Index fell 1.12%, while China’s CSI 300 rose 0.81%, closing at 4,621.75, helped by a jump in exports.
Japan’s Nikkei 225 ticked up 0.18% to finish at 50,581.94, and the Topix index added 0.65%, ending the day at 3,384.31. Over in South Korea, the Kospi surged 1.34% to 4,154.85, and the smaller Kosdaq gained 0.33%, closing at 927.79.
Australia’s ASX/S&P 200 dipped 0.12% to 8,624.4, as investors looked ahead to the Reserve Bank of Australia’s policy meeting. In the US, markets closed stronger last Friday. The S&P 500 climbed 0.19% to 6,870.40, clocking its fourth green day and closing just 0.7% off its all-time high.
The Nasdaq Composite rose 0.31% to 23,578.13, and the Dow Jones added 104.05 points to end at 47,954.99.
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