EBS Reports Volumes Dropping to Lowest Level Since July 2014

In line with the broad industry trends, the trading volumes for ICAP’s electronic foreign exchange market place declined last month

The trading volumes on ICAP’s electronic foreign exchange platform EBS throughout the month of November have marked a decline by 10 per cent when compared to October and totaled $75.5 billion daily. The figure is also lower by 39 per cent when compared to the same month last year.

Looking at the month of November, volatility on the foreign exchange market has been fairly moderate. While there have been some moves in major currency pairs, the majority of traders is sticking to its guns in the run up to the first Federal Reserve rate hike since 2006.

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Another major central bank, the European Central Bank, is holding its last meeting for the year later today. Market players are expecting some big commitments to the inflation target by the President of the ECB, Mario Draghi.

Looking at the average monthly numbers for ICAP’s EBS, the figures are still higher when compared to last year by about 6.7 percent to $98.7 billion per month.

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While typically it is a quiet month for the foreign exchange markets, this December could prove to be much more different than last year. Volatility around the key central bank events which are going to unfold in the coming days could boost trading volumes to much higher levels than in November.

Commenting to Finance Magnates the company said in a statement, “Reiterative commentaries from the Fed and ECB regarding policy actions slated for December gave November a “wait and see” tone and impacted overall activity in the major pairs. Year-on-year volumes were muted compared to November 2014 when the market benefitted from strong directional trades in EUR/USD following the September 2014 ECB rate cut and 30 October 2014 BoJ QE announcement.”

“Chinese yuan volumes were also lower in November with market participants side lined waiting for direction after the string of speculated interventions in Sept/Oct. Activity picked up prior to the IMF announcement on 30 November as efforts were made to close the onshore-offshore spread. Whilst the inclusion of the renminbi in the SDR basket market is seen as a positive step towards further internalization of the currency, it is not anticipated to increase average daily volumes in the short-term,” the statement added.

According to the statement that EBS provided to Finance Magnates, despite an overall quieter month for eFix, the end of month brought in a new record in volume.

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