After kicking the year off with a record-breaking run in January, the forex industry followed through with yet another strong performance last month. And that’s with fewer trading days, too!
GTX, the institutional FX arm of GAIN Capital, set another average daily volume (ADV) record of $16.1 billion in February, up 16% from the previous month’s $13.9 billion level. Total trading volumes on its FX ECN for the month surged from January’s $305.0 billion to $322.7 billion.
Forex ECN FastMatch recorded its second best-ever month in terms of FX trading volumes at an ADV of $21.1 billion, just a few notches shy of its record $22.5 billion in May last year. This also continues its rebound from a lackluster Q4 2017 with an average ADV $17.1 billion.
Institutional forex ECN Cboe FX Markets (formerly Hotspot FX) also set a new ADV record of $44.3 billion in February 2018, beating its earlier month’s $42.6 billion ADV by 4%.
In addition, the firm also almost beat its previous trading daily volume record of $68 billion in January 25 at $67 billion on February 6.
The breakdown of currency pair volume from Cboe FX Markets reveals that EUR/USD was still the most actively traded one 24.1% or $8.41 billion of total trading, followed by USD/JPY at 16.3% or $5.67 billion. It’s worth noting, though, that the share of EUR/USD trading ticked slightly lower while USD/JPY enjoyed more activity.
Over in Tokyo, the TFX reported a 25.2% month-over-month gain in contracts on its Click365 platform. This translates to an impressive 29.3% year-over-year increase.
Looking at the breakdown of pairs traded reveals that GBP/JPY had a huge jump in volumes from the previous month, followed by GBP/USD. Emerging market currencies such as the South African rand and Mexican peso also saw increased volumes for February.Sterling gave up a lot of ground to the dollar and the yen for the most part of February, despite a few positive Brexit-related updates and BOE hawkishness. After all, there were a few data misses that might have led traders to doubt that the U.K. economy could stay resilient or afford another hike. Besides, Brexit jitters resurfaced towards the end of the month.
Strong and prolonged dollar movements might have also encouraged more trading activity as traders tried to take advantage of these trends. Changing market sentiment and a shaky performance for equities also likely drew investors back to the forex scene while cryptocurrency price action also slowed.