Forex price action cruised slowly for the most part of June before kicking into high gear towards the end of the month, as central banks’ monetary policy biases came under the spotlight. Were trading volumes able to recover from their shaky performance in May?
Hotspot FX was among the first to release their June numbers and the forex ECN reported a 1% month-over-month dip to $27.9 billion in average daily volume (ADV). Activity was actually subdued during the first couple of weeks but the $32.4 billion ADV in the last week of the month pulled the numbers up. Monex Group and forex broker Exness also reported relatively steady metrics for the month.GTX, which is the institutional arm of Gain Capital Holdings, saw a larger 12% decline in monthly trading activity. Total trading volumes slipped to $270.1 billion in June, translating to a $12.3 billion ADV compared to May’s $13.3 billion ADV.
Another forex ECN, FastMatch, reported a 12% month-over-month drop in trading volumes from $22.5 billion in May to $19.7 billion ADV last month. Just like Hotspot FX, the firm also noted a pickup in volumes for the latter part of June but these weren’t enough to make up for the slowdown earlier on.
On the other hand, multibank FX aggregation service FXSpotStream boasted of a 16.4% monthly jump in trading activity to reach its highest ADV so far this year, even challenging the election-driven November 2016 volumes.
Over in Japan, the Tokyo Financial Exchange printed a monthly gain of 8.3% in June volumes based on Click365 contracts.
The largest gain in monthly trading volumes was seen for CAD/JPY as the change in BOC rhetoric spurred by policymaker Wilkins and supported by head honcho Poloz triggered strong moves for the Canadian currency around the middle of the month.
Next up are the pound pairs which also enjoyed additional volatility from headlines related to the U.K. election results and Brexit talks. Sterling also got a hawkish boost later in the month as the BOE minutes revealed that more policymakers voted to tighten.
Other yen pairs managed to see small gains in activity also, likely due to the yen selloff that ensued when risk appetite kicked in during the latter part of June and when global bonds started selling off.
Looking ahead, my buddy Forex Gump has listed a number of market themes to watch out for this quarter and I’m inclined to think that the last couple of ones could hold the most potential in terms of keeping volumes supported. Any other factors you think might impact FX volumes this month?