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Foreign Exchange

Thomson Reuters FX volumes well below average for January

Average daily FX spot volumes on Thomson Reuters’ main trading platforms rose 11% month-on-month in January, though trading volumes were well below the average for January in the past two years, data on its monthly trading volumes show.

Average daily volumes (ADV) were in excess of $127 billion last month on the company’s main FX spot trading services – Thomson Reuters Dealing, Matching and Reuters Trading for FX – 12% lower than the $145 billion for January 2011. Despite a recovery in sentiment across financial markets and commonwealth currencies in particular posting impressive gains – typically important currencies for Thomson Reuters – the jump in January volumes has been comparatively modest in relation to the past two years. ADV rose, on average, more than 30% at the beginning of 2010 and 2011.

Indeed, discounting the typically slow month of December, volumes are at their lowest level since August 2010.

The year-on-year fall in FX volumes on Thomson Reuters follows a similar pattern to the drop experienced on other leading interdealer brokers and exchanges that report monthly data.Year-on-year volumes on ICAP’s EBS platform are down 23% in January while US-based exchanges CME and ICE reported falls of 21% and 16% respectively.

In it's interim management statement, ICAP attributed the lacklustre January volumes to the perceived threat of central bank intervention in the Swiss franc and Japanese yen that has reduced volatility, and consequently dampened trading volumes in these currencies.

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