LONDON, Feb 5 (Reuters) - Currency trading through online retail brokers fell by roughly 10 percent to $279.5 billion a day in the fourth quarter of last year, industry data showed on Friday.
Previously viewed as a sideshow to the wholesale trading between banks and big investment and pension funds that forms the core of the $4.5 trillion a day global currency market, the retail sector has grown steadily in the last three years.
A drop in wholesale volumes over the past year has also made retail accounts a bigger percentage of overall market activity, but the new quarterly numbers showed trading was down at the end of last year in both quarterly and annual terms.
Signs that retail volumes are also flagging would be further bad news for an industry squeezed by tightening margins on trading and the broad impression that a decade of constant growth may have topped out.
Volumes at five of the top six retail brokers had fallen by 25 percent or more, data and estimates compiled by industry news and analysis website Finance Magnates (www.financemagnates.com) showed.
Two Asia-focussed brokers - GMO Click and DMM.com - continued to lead the website's rankings in terms of monthly volumes, trading a total of around half a trillion each on the month.
Daily trade in Japan - the biggest market for small leveraged bets on currency movements from non-institutional players - fell by almost $50 billion to $111 billion a day.
The numbers, seen by Reuters but not verified with each of the companies, showed volumes at U.S.-based Gain Capital and Denmark's Saxobank fell by 25 percent.
FXCM rose one spot to third place thanks to a fall in volumes of just 2 percent on the quarter. (Editing by Katharine Houreld)