Trading strategies, particularly investors' search for yield, are largely responsible for the rise in foreign exchange trading volumes, according to a report* on Monday from the Bank for International Settlements.

The drawn-out decline in the US dollar and investors' search for returns outside bonds and equities were the main triggers for the growth in the FX market, the report said. The persistent trend of dollar weakness against other currencies led investors and companies to increasingly hedge their currency exposure and attracted participants interested in foreign exchange as an asset class separate from more traditional bonds and equities.