Although the vast bulk of activity in foreign exchange takes place in the over-the-counter market, significant volumes are also transacted on the CME. The exchange’s FX product suite is now so successful that is possibly the second-largest trading venue, other than on the banks’ own proprietary systems, after EBS. The CME’s revival has been staggering. In April 2001, its average daily turnover amounted to just $6 billion a day. This August, that figure had grown to $90 billion and September’s volumes, albeit distorted by the calendar roll, are set to be even higher.
The CME has clearly tapped into demand for a viable exchange-traded FX product and it has also capitalized on the fact that it provides a multi-asset trading venue. "We’ve seen traders moving across into FX from...
