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Foreign Exchange

Hotspot FX volumes bounce back in May; CLS figures confirm rise in activity

Further evidence of the recovery in activity in the FX markets emerged as Hotspot FX, the multi-dealer platform owned by Knight Capital, announced a bounce back in trading volumes in May.

Figures showed average daily volumes at Hotspot rose by 14% to $56.5 billion last month, with a total of $1.299 trillion traded over the platform. However, that was still down 16% since May 2011. The rise in volumes at Hotspot was replicated across the industry last month as renewed fears over the potential for Greece to leave the eurozone pushed EURUSD, easily the most traded currency pair, out of the tight trading range that had subdued activity in the first few months of the year.

Data previously from EBS, Thomson Reuters, FXall and CME Group also showed rising volumes in May.

 May relative volume change of reporting FX venues

 

Figures from Hotspot showed EURUSD gained 1.45% in market share to 41.75% and continued to be the most actively traded currency pair on the platform.

Volumes in AUDUSD also rose 1.79%, making it the second most traded currency pair. Activity in AUDUSD was boosted by fears over a slowdown in China, which saw it slump through parity for the first time this year.

In contrast, the market share of USDJPY dropped 2.84% to 9.66%, taking it from the second to fourth most traded. That was most likely to have been because of the relatively tight trading range of the currency, which has been contained by fears over possible intervention to stem yen strength from the authorities in Tokyo.

Meanwhile, the upward trend in volumes was confirmed by figures from CLS, which clears about half of FX trades globally.

 CLS average daily volumes and values

 
 Source:CLS

They showed the value of trades submitted for clearing in May were up 12% for spot on the month, 2% for swaps and 4% for forwards. On the year, spot values were down 10%, while swap values were up 9%.

Again, CLS figures showed interest in the JPY was waning, with USDJPY and EURJPY the only currency pairs to see falling activity.

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