FXSpotStream Posts Record Trading Volumes Amid Continuing FX Volatility

The rise of FX volatility since the start of the year has not abated, leading to brisk trading volumes

FXSpotStream posted a record month in March, reaching $606 billion in trading volumes. The month was preceded by two other strong reports in January and February. Foreign exchange trading has picked up materially since the start of the year, as volatility across multiple asset classes spiked higher in the first quarter of 2018.

Overall, trading volumes in March were the company’s best ever. The figure rose by 5.1 percent from February and by a staggering 40 percent since March 2017. Looking at the Average Daily Volumes metric, the number was at $27.6 billion, which is the second highest after February 2018. Adjusted for the Good Friday holiday last week, it was only 1 percent lower than in the preceding month.

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Broad-Based rise in FX volatility continues

March trading was led by political turmoil in Europe, the UK and the US. News related to trade wars have been dominating financial markets, driving excess volatility across a multitude of asset classes.

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The first quarter of the year was dominated by a spike in volatility that started with FX and translated into equities and commodities in February. The second quarter of 2018 started with another blast, as the Dow Jones Industrial Average plunged 750 points only to recover in the later part of the day and close circa 500 points lower on the day.

First quarter results look promising for FX industry

The broad FX industry should be looking at record income in the first quarter of the year as active traders have been returning to the market. Volumes have increased materially, with FXSpotStream reporting a rise in Average Daily Volumes quarter-on-quarter by about 33.5 percent.

When compared to the first quarter of 2017, total volumes were higher by about 44 percent.

FXSpotStream is not alone in posting massive gains in the first quarter of the year. Brokers and ECNs have been performing materially better since the start of 2018. Regulatory challenges ahead, the industry is set to beef up its cash balances ahead of what seems to be the biggest regulatory overhaul for the industry since the introduction of Dodd Frank in the US.

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