Foreign exchange settlement provider, CLS Group saw strong volumes in January 2021 as investors flocked to FX markets amid violent market swings of fears of a coronavirus-fueled global recession.
The average daily traded volume submitted to CLS was $1.92 trillion in January 2021, which is up 9 percent month-over-month from $1.76 trillion in December 2020. Across a yearly timetable, the figure was up 8.5 percent relative to January 2020’s figure of $1.77 trillion.
At a currency pair level, the increase can be attributed to a significant surge in volumes for the following currency pairs: EUR/USD (+12%), USD/JPY (15%), USD/CAD (+12%) and AUD/USD (+33%), while GBP/USD declined by 15%, said CLS’s Head of Information Services, Masami Johnstone.
CLS reported swaps volumes at $1.36 trillion in January 2021, which is up from $1.26 trillion in December 2020, a rise of 7.9 percent month-over-month. Further, the figure was up by the same percentage on a yearly basis.
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Global FX swap volumes surged to nearly $3.2 trillion per day and now account for almost half of global FX trading, according to the Bank for International Settlements’ latest survey, mirroring a pick-up in the spot market and reflecting strong trends in OTC sectors.
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In terms of CLS’ spot FX volume, the group has reported the figure at $461 billion in January 2021, which is up 13 percent relative to $408 billion in the month prior. Additionally, the figure was higher by 15 percent over a yearly basis from the $401 billion set in 2020.
A mixed performance was pronounced across CLS forwards business, which yielded a figure of $95 billion last month, which is up 6.7 percent over a monthly basis, but was down 12 percent year-over-year from $108 billion in January 2020.
CLS Group, which provides risk mitigation and settlement services for FX dealers and institutions, has recently entered a services agreement with Capitolis. Through the partnership, Capitolis’ proprietary technology platform will integrate CLS’ data to help clients optimize their balance sheet exposure by eliminating unnecessary positions. Additionally, the company helps firms in finding the best party to hold the remaining positions, enabling a much more streamlined solution to service the needs of both sell and buy sides of the market.