So much for that strong surge in forex volumes for June! Last month’s metrics from a few brokers and exchanges hinted that the industry might be in for a slowdown this summer. Based on the monthly report from CME Group, the world’s leading and most diverse derivatives marketplace, forex trading volumes averaged at 733,000 contracts per day in July, roughly 25% lower compared to that of June.
In the Tokyo Financial Exchange (TFX), the total trading volume of FX contracts for July was down 8.1% from the previous month. Looking closer at the exchange’s trade data revealed that CHF/JPY, USD/JPY, and EUR/JPY suffered the brunt of the downturn in volumes while GBP/USD, CAD/JPY, and AUD/JPY showed strong monthly gains.
Over in Russia, Moscow Exchange (MOEX) reported a 5.9% monthly decline in average daily trading volumes for July from 1.33 trillion RUB to 1.25 trillion RUB. On a more upbeat note, the exchange also saw an 8.6% monthly increase in spot FX trading volumes, bringing the overall forex market turnover up by 3.2% in July.
In addition, year-over-year comparisons still reflected significant growth in the industry. According to the CME Group, average daily FX trading volume was up 26% in July 2015 compared to the same month last year. MOEX indicated a 42.4% annual growth in overall forex market turnover while TFX even reported a 105.3% year-over-year gain in total trading volume of Exchange FX Margin contracts based on Click 365 data. Interestingly enough, EUR/USD trading volumes on TFX were up nearly sixfold year-over-year.
In a nutshell, these figures suggest that even though the summer doldrums seem to be setting in, the industry continued its expansion from the previous year. As you can see from the average daily volumes table from the CME Group, forex activity generally dips in July and August after exhibiting a strong jump in June. But while the 2015 figures represent growth from 2014, trading activity last month seems to have paled in comparison to July 2013 and July 2012.
As for the trading activity breakdown by currency pair, it seems that the higher level of uncertainty associated with the Swiss franc and the euro due to SNB intervention prospects and the Greek debt drama may have dragged volumes lower. On the other hand, central bank announcements and commodity price movements are probably accountable for the increased trading activity for comdolls and GBP/USD.
Got any other conclusions you can draw from these July 2015 industry metrics? How do you think forex volumes will fare this August? Don’t be shy to share your thoughts in our comments section!