Looks like it will be a very good start to the year for the Retail Forex industry.
In a survey of a number of leading retail forex brokers in different jurisdictions, LeapRate has detected a common theme – January was a great month, with FX trading volumes up significantly over the past several months.
We now believe that many retail forex brokers will report January trading volumes of 20-30% over Q4 levels. Some, even more.
Our discussions have been supported by the early data put out by a number of institutional FX platforms.
As was first reported at LeapRate, BATS's Hotspot FX saw January 2016 volumes jump 27.5% to $30.7 billion ADV, its best result reported since March of last year. And FastMatch saw its FX trading volumes top $10 billion ADV for the first time since 2014 during January. The last trading day of the month – Fr iday January 29 – was FastMatch's fourth best ever day volume-wise, at more than $21 billion.
The improved trading volumes, of course, are being driven by some amazing volatility seen during January across both currency and equity markets.
An excellent example is the Canadian dollar (see chart at right). Canada's Loonie ended January in virtually the same place it began, at just below USDCAD 1.40, or about 71 US cents per CAD. But during the month the USDCAD pair had a number of days in which it was either up or down more than 1%, as the Canadian Dollar dropped in value to below 69 US cents mid-month before recovering alongside Crude Oil during the last few trading days of January.
At this point we don't yet know if January 2016 will be a record month for the retail FX sector, as measured by LeapRate's Retail Forex Volume Index. That distinction is still held by October 2014's $360 billion ADV, nearly topped by last January's $358 billion driven in part by the Swiss Franc spike of January 15, 2015.
But it is likely to be close.
Stay tuned to LeapRate over the next few days for detailed coverage and analysis of all the institutional and retail FX volume results as they become available.
- ^ Hotspot FX saw January 2016 volumes jump 27.5% (leaprate.com)
- ^ FastMatch saw its FX trading volumes top $10 billion ADV (leaprate.com)
- ^ Canadian Dollar dropped in value to below 69 US cents (leaprate.com)
- ^ Retail Forex Volume Index (leaprate.com)