December 2015 Forex Industry Metrics: Strong Finish!

For the retail forex industry, the struggle was real during the latter half of 2015. But just when it seemed as though the year would fall into the dark side, the force awakened in December. Does this bring a new hope for 2016?

According to data from the Intercontinental Exchange (ICE), an international operator of exchanges and clearinghouses, average daily volumes of forex and credit-exchange contracts rose to 47,000 in December 2015, 34.3% higher compared to November’s 35,000 contracts. However, the final tally for Q4 yielded an 18% decline from the same period in 2014 while the December 2015 metrics were down 11% compared to that of December 2014.

Monex Group also reported an increase in global forex activity, with its subsidiaries reporting 30.5% monthly increase to $29.5 billion in December 2015. However, this is still 45.3% lower compared to the same month in the previous year.

Similarly, CME Group, which is the world’s leading and most diverse derivatives marketplace, showed a 23% increase in forex volumes from 713,000 contracts per day in November to 884,000 contracts per day in December. For Q4 2015, average daily volumes reached 13.2 million, down 11% from the previous period.

Data from Tokyo Financial Exchange (TFX) indicated that the most actively-traded pair in the exchange during the month was CAD/JPY, presumably due to the sharp drop in oil prices then. This currency pair enjoyed a whopping 460.7% jump in volumes from the previous month while EUR/USD came in second with a 116% gain.

Data from Tokyo Financial Exchange

Data from Tokyo Financial Exchange

As for forex brokers, a few firms also reported decent gains in their December metrics, with GMO Click seeing a 14.9% gain in volumes and Saxo Bank showing a 3.7% increase. Hotspot FX saw an 8% monthly rise in trading volumes, concentrated mostly during the first half of December before most market participants took off for the holidays during the latter part.

One of the biggest factors that may have spurred this rise in volumes was the looming Fed interest hike during the December FOMC meeting. Profit-taking before the end of the year may have also affected forex volumes, with investors trying to cash in on their winnings before the holidays. Aside from that, central bank decisions earlier in the month also boosted volatility, encouraging short-term traders to be more active in the markets.

Do you think we’ll see another bump up in volumes this January? It looks like the financial markets were off to a rocky but exciting start! What’s your outlook for the forex industry this month?