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Foreign Exchange

Hotspot FX trading volumes slide in December; but full-year activity hits record high

Hotspot FX, the multi-dealer platform owned by Knight Capital Group, reported a sharp drop in trading volumes last month.

Average daily volumes dropped 31.1 % to $38.4 billion in December, down from $55.8 billion in November, the company said in its latest monthly trading report. That compares with a 34% fall in trading volumes at EBS, a 10% drop at CME and a 1% rise at Thomson Reuters.

The figures also revealed the continuation of the trend seen across other trading venues, with the share of EURUSD trading falling and the share of commonwealth currencies, such as GBP, AUD and CAD, rising.

Although there was no change in the top-five currency pairs measured by volume on Hotspot, the share of EURUSD fell by 4.6%, while that of GBPUSD rose by 1.1%.

That trend, which anecdotally was been put down to frustration among investors of the lack of movement in EURUSD despite the escalating eurozone debt crisis, has been cited as the driver of the recent relative outperformance of interdealer broker Thomson Reuters over EBS.

For the full year, however, volumes on Hotspot rose to record levels, with average daily volumes climbing 60.4% last year to $59.2 billion.

Hotspot accounted for 8.7% of publically reported electronic spot FX volumes in 2011, up from 5.9% in 2010, with $15.4 trillion traded over its system.


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