After a bit of a rough start early on in the year and a feeble recovery in the months that followed, the forex industry seems to have stepped on the gas in June. According to data from Intercontinental Exchange, which is a global network of exchanges and clearinghouses, average daily volumes of forex contracts jumped by 23.2% in June and reflected an annualized 116% growth from the previous year.
The CME Group, which is one of the largest options and futures exchange in the United States, reported that its June 2015 forex trading volume reached 987,000 contracts per day for an average daily notional value of $104 billion. That’s up 18% from the previous month and 29% from June 2014.
Over in the United Kingdom, ICAP also reported a healthy increase in June FX volumes based on the numbers from its EBS electronic trading platform. Trading volumes surged to $100.8 million each day, amounting to a 5.1% month-over-month growth from May’s $95.9 billion per day figure. On a year-over-year basis, this reflects a 26.6% increase.
Even Asia saw a strong rise in trading activity, with Japan’s largest brokerage GMO Click Securities churning out an impressive 29.6% monthly gain in volumes and an even more jaw-dropping 201% increase from the same month in the previous year. Its biggest rival, Monex Group, also reported a strong comeback in its forex metrics to a monthly trading value of $42.1 billion in June. Apart from that, Monex Group saw a rise in total over-the-counter forex accounts, the number of active accounts, and average trade values per day.
According to data from the Tokyo Financial Exchange, one of the biggest contributors to the growth in volumes was the rise in trading activity for the USD/JPY currency pair. EUR/JPY and NZD/JPY trading also posted substantial gains in June, spurred mostly by the Greek debt drama and the RBNZ’s interest rate cut. In addition, demand for the Japanese yen was renewed after BOJ Governor Kuroda mentioned that the currency’s excessive gains have already been corrected.
Moving forward, new themes in the forex market such as China’s stock market slump and Iran’s pledge to double its oil production could continue to keep trading volumes supported in the months ahead. It seems that market participants have shaken off the cautious vibes after the SNB shocker and are starting to warm up to prevailing uncertainties. Take note, though, that the summer months in the U.S. tend to be accompanied by a slowdown in market activity. How do you think will the July industry metrics turn out?