Forex Industry Gains Steam in June

Late in May, we noted that activity in the forex market had been rising, as evidenced by the huge leaps in trading volume and earnings experienced by two of the industry’s largest brokers.

FXCM’s retail trading volume rose by almost 50% in April compared to the same month last year. Meanwhile, it saw an increase in revenues of 20% in Q2 2013, translating to a 76% surge in earnings before interest, taxes, depreciation, and amortization (EBITDA).

Gain Capital, another forex giant, reported a 26% year-on-year rise in retail trading volume in April. It also posted a 50% year-on-year increase in revenues and a 500+% surge in EBITDA.

While FXCM and Gain Capital don’t make up the entire forex market, they are two of the biggest brokers in the world. Hence, their trading metrics can provide us with useful insight on activity in the forex market as a whole.

The good news is that it seems that growth hasn’t been limited to these two giants. What’s even better is that it seems the improvements have been sustained into the month of June!

Saxo Bank, which is also one of the world’s leading forex brokers, just released one of the first trading volume reports for the month of June. It recorded a 1.4% increase in average daily forex volumes last month, which is 13% higher than last year.

Meanwhile in Japan, forex activity surged as well. According to stats from the Tokyo Financial Exchange, average daily contracts of its Click 365 FX trading product clocked in at 293,997, which translates to a 5.8% growth from the previous month.

Many believe that the increase in June can be attributed the high level of volatility that we saw in the markets. Remember, bigger moves in the markets means more money-making opportunities for traders!

Like Kim Kardashian’s new figure, growth in the forex industry hasn’t gone unnoticed. Some say that the expansion in the industry seen over Q2 is the reason why publicly-traded forex brokers saw their stocks soar to record highs.

By the end of the second quarter of 2013, FXCM was up 20% while Gain Capital was 42% higher. Meanwhile, shares of IG Group appreciated by 9%. The volatility brought about by the pick-up in activity was definitely positive for the forex market in general. Looking back to the quarter that was, we saw the price of gold drop like a rock while equity markets were basically flat.

It will be interesting to see a clearer picture of market activity. So far, our data for June is still incomplete. But hopefully, releases from other brokers and institutions will bear the same good news and show further improvements in forex trading activity.

Make it a habit to check my blog regularly. I’ll be sure to update you on new developments!