Canada's FX volumes slump in October 2011

The summer volatility helped boost trade volumes however Canada’s Foreign Exchange Committee announced shocking results for the world’s tenth largest economies FX trade volumes. Total average daily turnover in traditional foreign-exchange products in Canada dropped by 14.4% to $52.4 billion in October, from $61.2 billion in April.

The figures mark a 9.3% decrease from the year-earlier total, $57.8 billion, according to a survey by the Canadian Foreign Exchange Committee released in conjunction with the Bank of Canada. It was also the first decline in traditional foreign exchange turnover since April 2009.

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The survey, with data collected from the eight banks with the largest foreign exchange activity in Canada, shows that the monthly turnover in October of traditional foreign exchange products, defined as spot transactions, outright forwards and foreign exchange swaps, totaled more than $1 trillion.

On an average daily basis in October, spot, outright forward and foreign exchange swap volumes decreased by about 8%, 11% and 18%, respectively, compared with the month of April 2011.

The average daily turnover of foreign exchange derivatives, which involve currency swaps and options, totalled $3.3 billion, marking a 15.4% decline from six-months-earlier figure. Currency swaps were lower by 17%, and options by 13%, according to the data.

In hindsight the worlds largest brokers like Saxo Bank, FXCM and Gain Capital trade between $10 to $13 billion a day.

Canadians intersted in FX can now trade with locally regulated CMC Markets and FXCM, although British Columbia has stricter rules for derivatives brokers.