Recently released data from CLS Bank suggest that the FX market did not experience any seasonal slowdown during December. CLS says it made an average of 218,700 payment instructions a day throughout the month. The average daily value of transactions passing through the system was $2.6 trillion, which CLS says was an increase of 3.7% on November.
CLS adds that it made a record value day on December 21, settling $4.6 trillion-worth of transactions. The level of activity has subsequently continued to grow in the New Year and CLS reports that on January 17 it made a total of 502,384 payment instructions. These had a gross value of $3.9 trillion. CLS is now handling a daily average of 220,000 payment instructions, with a gross value of $2.6 trillion.
Jonathan Butterfield, executive vice-president, sales and communications, at CLS, believes that the recent increase in volume is possibly being driven by an uptake in algorithmic trading.
“The December downturn didn’t materialize. People kept trading at a pretty consistent level. We reckon it’s partly driven by an increase in algorithmic trading. There was quite an uptick in sub-$1 million activity,” he says. “We don’t know definitely if these were hedge fund trades, but we believe they probably were,” he adds.