FXCM Group Reports Drop in XAU/USD Spreads

FXCM Group has published its execution quality metrics for the month of March 2020 this Tuesday, with spreads for cryptocurrency and certain foreign exchange (forex) instruments being influenced by high levels of volatility.

The coronavirus pandemic has caused Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term issues for a number of assets due to the higher levels of volatility, with gold, in particular, seeing a surge in demand, whilst also struggling with supply issues caused by the crisis.

During the month of March, the retail broker reported that the active trader average spread for XAU/USD was 15.7 pips and the active trader effective spread was 16.3 pips. This is significantly lower than the previous month, which posted spreads of 35.1 pips and 32.3 pips, respectively. It is also down on a yearly comparison, as the average spreads published in March of last year was 35.1 pips and 35.0 pips, respectively.

As Finance Magnates reported, in March, Liquidity Providers Liquidity Providers A liquidity provider (LP) constitutes either individual and/or institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as the both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profi A liquidity provider (LP) constitutes either individual and/or institution that functions as a market maker in a given asset class. Broadly speaking, liquidity providers will act as the both the buyer and seller of a particular asset, thus making a market. In the equities space, many stock exchanges rely on liquidity providers who make the commitment to provide liquidity in a given equity. These liquidity providers commit to providing liquidity in the hopes that they will be able to make a profi Read this Term, market makers, and exchanges struggled to accurately price the commodity, and some, in fact, even stopped pricing gold altogether for a time. At the same time, spreads widened considerably, and although things have returned closer to normal, the liquidity issues still remain.

For the cryptocurrency pairs, FXCM averaged 28.1 pips on BTC/USD, which is slightly up from the 25.7 pips average recorded during the previous month. When measuring the spreads achieved in the same month of the previous year, last month’s spreads are higher than the 25.7 pips average in March of 2019.

EUR/USD spreads increased 300% MoM on FXCM

The average spread for the EUR/USD, the most traded currency pair in the world, increased on both a monthly and yearly comparison for FXCM, coming in at 0.4 pips. Against February of 2020, this is higher by 300 per cent, up from 0.1 pips. It is also higher than the 0.2 pips noted in March of the previous year.