FX Trading Volumes Continue Downward Trend on TFX in August

FX volumes fell both on a monthly and yearly comparison.

The summer trading lull appears to be well and truly back in swing, with the Tokyo Financial Exchange Inc. (TFX) publishing its trading volumes for the month of August today, revealing a drop in trading across the board.

This year has been completely altered by the coronavirus pandemic, as have the trading markets. In March, fears of COVID-19 peaked, and so did market volatility, resulting in higher trading activity and volumes.

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Since March, volumes have been on the decline. However, June offered a surprising surge in trading activity, despite the fact that historically, June is typically a quiet month due to it being summer in the northern hemisphere.

Following on from June, July’s volumes reverted back to the declining trend. Today, the first wave of trading providers have published their volumes for August, TFX among them, and the picture does not look optimistic.

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Taking a look at foreign exchange (forex) trading on the exchange, the total volume of FX Daily Futures contracts was 1,711,391 contracts, with a daily average trading volume of 81,494 contracts. 

When measuring this against the previous month, volumes have decreased by 8.7 per cent. Year on year, the decline is even more pronounced, with volumes coming in lower, by 42.5 per cent in August 2020.

TRY Trading Increases on TFX in August

Surprisingly, the Turkish lira against the Japanese yen (TRY/JPY) posted the strongest month on month gain, with 219,176 contracts traded during the month. This was an increase of 43 per cent against July, but it was still down by 60.3 per cent against the previous year.

The biggest monthly decline was noted by the Euro against the US dollar (EUR/USD) currency pair. Furthermore, in August, volumes fell by 35.2 per cent against July but were actually stronger year on year by 19.4 per cent.

The total trading volume of Equity Index Daily Futures contracts was 717,777 contracts, with an average daily trading volume of 34,195 contracts. This represents a monthly drop of 4.4 per cent. Additionally, against August of 2019, last month’s volume has dropped by 40.1 per cent.

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