Alpari Trading Volumes Mark a Slight Drop in November

The Russian economy continues to contract after low commodity prices and high interest rates have materially impacted the country

Trading volumes at Alpari have slowed down somewhat in November, with the company reporting the figure at $87.5 billion, which is lower by 3.5 percent when compared to the previous month. The number is also lower by about 3 percent when compared to the average monthly volume for the past twelve months of $90.1 billion.

Looking at a comparison for the same month in 2014, the figure is 5 percent lower than November of last year. A number of brokers have reported slower figures when compared to the month of November, with FXCM Inc (NYSE:FXCM) being the most recent company to report a decline.

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The figures at Alpari Russia are also somewhat dependent on the Russian rouble exchange rates and the economic growth in Russia, which is the biggest market for the brokerage. The company is expected to apply for a regulatory license from the Bank of Russia shortly, as a number of other major brokers have already done.

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Alpari Russia, trading volumes
Alpari Russia trading volumes for November

Looking at recent events, the slide in oil prices has dramatically impacted the exchange rate of the Russian rouble. In the mean time, the Russian economy contracted by 4.1 percent in the third quarter, reflecting an economy that has been suffering on a number of fronts – from low commodity prices to economic sanctions.

In a recent commentary, Barclays highlighted a set of issues which the Bank of Russia is currently facing, “The CBR had previously been prepared to consider cutting rates as early as December, but ‘the slowdown in consumer prices occurred somewhat slower than predicted.’ The CBR anticipates inflation to decline rapidly and if realised, the CBR indicated it will be prepared to initiate rate cuts at one of its next MPC meetings.”

Following up, the economics research team of the London headquartered bank explained, “We largely agree with the CBR’s assessment of the Russian economy and anticipate rate cuts beginning in Q1 16.”

The pressures on the exchange rate of the Russian rouble are therefore unlikely to continue, with the ongoing decline in a number of commodity exports for the country further pressuring the budgets of retail traders in the region.

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