The CFTC issued an account of July’s financial data for reporting Futures Commission Merchants (FCMs). Just as the the market activity appeared to be slowly picking up derived from retail volumes reported in July, the retail forex market in the U.S. bottomed out before the usually tough summer months.
Total retail forex funds rose by $41,413,312 in July when compared to the previous month, with the top three retail forex brokerages registering substantial rises. Retail forex funds at OANDA rose by $15,387,740 for a total of $142,053,880. GAIN Capital added $14,676,315 totaling 120,170,642, while FXCM added $12,055,943 to round up the top three with $203,223,349.
Coupled with returning FX volatility, the data sheds light on the recent rally in publicly listed U.S. retail forex brokers, GAIN Capital and FXCM. After bottoming out in the aftermath of releasing their second quarter earnings in the first half of August, shares of GAIN Capital (NYSE:GCAP) added 8%, while FXCM’s (NYSE:FXCM) rallied about 20%.
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Market volatility indicates that the worst period for the industry this year might be over, as some brokers reported retail forex volumes in August turning the corner. After a record setting first week of September, we are seeing a very vibrant and active foreign exchange market for a second week in a row.
Market share leaders remain the same with FXCM occupying the top spot, even before the acquisition of IBFX’s MT4 trading accounts.
A broad-based US dollar rally is sparking trading activity across all major currency pairs. The Japanese yen marked a 5-year low against the US dollar, while the British pound has entered a rumor driven trading phase with the Scottish independence referendum around the corner. According to daily volumes data released by KCG Hotspot, electronic trading volumes have picked up quite materially in September.