FX trading wasn’t the place to be in the first half of 2014, as historically low volatility depressed industry volumes. But they have since powered higher to more active levels. This fact was seen in the CME Group’s May trading volumes.
During the month, average daily volumes (ADV) of FX futures and options was 835,385 contracts, slightly above the 835,138 figure for April. (For ADV, Finance Magnates used a 21 day month similar which contrasts to the CME’s own calculation of 2o days. The discrepancy is based on our inclusion of trading during Memorial Day which contained an shortened session for FX trading. According to the CME and using a 20 day month, their ADV was 880,000 contracts) However, when compared to 2014’s trading, the story was much rosier with ADV rising 48.5% in May compared to the same period last year. Even in the month- over-month comparisons, May was stronger than the numbers make it appear as the month contained bank holidays in the US, UK, Europe and Asia, with limited trading activity during those trading sessions. Overall, during May, a total of 17,543,088 futures and options contracts were traded during the month.
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In individual products, month-over-month activity in May was led by the British pound, where total volumes grew 16.5% (see chart below). Also active was trading of the New Zealand dollar (kiwi) where total volumes doubled activity from 2014. Trading in the kiwi was spurred by a jump in volatility in the currency as it depreciated about 6.8% against the US dollar in May as the NZD/USD dropped from 0.7625 to 0.7107. The move in the NZD/USD moved it to its lowest levels since 2010.