London extended its lead as the dominant global centre for foreign exchange dealing in the opening months of this year, stealing a march on New York to take a still larger share of world currency trading.

The latest twice-yearly surveys released yesterday by the Bank of England and the New York Federal Reserve showed London tightening its grip on the currency markets, leaving its American rival trailing.

Overall average daily turnover in London's currency markets in April leapt by almost a third compared with levels last October, and by 54 per cent from levels recorded a year earlier, taking it to $1.82 trillion (£912 billion) a day, according to the latest survey of 33 leading institutions by the City's Foreign Exchange Joint Standing Committee.

The year-on-year surge in London's average trading volumes compared with a much more modest gain in New York of only 15.7 per cent from April 2007 levels.

Overall daily currency trading volumes in New York of $714.9 billion stood at only 39 per cent of London levels, down from 41 per cent at the same time last year.

London also continued to extend its lead over New York sharply as the leading global centre for over-the-counter (OTC) currency dealing trades made directly between two parties, yesterday's surveys showed.

Daily over-the-counter trading volumes in London during April leapt by 18 per cent from the same time last year, to an average of $136 billion. In stark contrast, New York suffered a sharp drop in its over-the-counter trading activity, with average daily volumes tumbling by more than a third to $34.4 billion in April, compared with levels a year before.

In London, dollar-based transactions continued to dominate the Square Mile's currency market activity, particularly dollar-euro trade, which accounted for 29 per cent of average daily turnover in April - down from 32 per cent in October.

Dollar-sterling trades accounted for an average 12 per cent of daily transactions, a little down from 14 per cent in October, with dealing in dollar-yen taking an unchanged 11 per cent of daily turnover on average.

Yesterday's confirmation of London continuing sway over currency markets will offer some consolation for City institutions at a time when the global credit crunch is forcing many to retrench and cut jobs.

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