CLS Closes 2019 with Mixed FX Volumes in December

Swap FX volumes fell on a monthly comparison but were still higher year-on-year.

Overall, 2019 was a rather lackluster year in terms of foreign exchange (forex) trading, with low volumes weighing heavily on trading providers. Recently, CLS has published its operational metrics for the final month of last year, which shows a mixed performance.

CLS Group is a leading provider of risk mitigation and settlement services for forex dealers and institutions. For many trading providers, December brought a slight uptick in trading volumes, up from November’s lows.

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However, according to the data provided by CLS, which measures the trading activity submitted to the company, December delivered different results across its three products – swap FX, spot FX, and forward FX.

For all three products, the average daily traded volume submitted to CLS was $1.60 trillion. This is down 0.5 percent from $1.61 trillion in November 2019. However, it is higher when measured against the same month of the previous year by 2.8 percent.

Out of the three, swap FX has by far attracted the highest average daily volume during December. In particular, an average daily traded volume of $1.145 trillion was submitted to CLS during the month. 

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Against November, last month’s figure has fallen by 2.3 percent. Nonetheless, it is higher than the $1.052 trillion ADV recorded in December of 2018 by 8.8 percent.

Spot FX and forward FX both managed to increase on a monthly comparison. Specifically, December’s trading volume rose by 1.1 percent and 21.7 percent month-on-month, respectively.

USDMXN FX Swap activity grows on CLS

Commenting on the volumes, CLS’s Head of Quantitative Research, Rob Franolic, said in a statement: “We saw average daily traded volumes in December 2019 of USD1.60 trillion, representing growth of 3% compared to December 2018.”

“The pattern in the last month mirrored that seen throughout much of 2019: significant growth in FX swap activity, (9% compared to December 2018), partly offset by a decline in the spot market.

“We also saw heightened USDMXN FX swap activity in December with a record daily average of USD23 billion. This coincided with Mexico lowering interest rates for the fourth consecutive time on 19 December and the signing of a new trade deal with the US and Canada earlier in the month.”

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