Refinitiv Reports Flat FX Volumes As Consolidation Continues

Refinitiv, the former Financial and Risk business of Thomson Reuters, today reported that the average daily volumes (ADV) of currency trading were $395 billion last month on the company’s main FX trading services. December’s ADV figure is the lowest in seven months, namely since currency volumes bottomed out at $383 billion back in May 2019.

Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term was coming back slowly to FX markets after a subdued fourth quarter. The modest bull run in recent weeks created a profitable opportunity for industry players, from major venues, including the likes of Euronext, to an array of retail-focused FX brokerages. This month, however, Refinitiv failed to capture volume rebounds, and its FX products were flat to slightly lower month-on-month.

In particular, Refinitiv saw a total average daily volume (ADV) of its FX products coming in below the $400 billion mark for the second month in a row. This total reflects trading volumes on financial data provider’s FXT platforms across all transaction types, including spot, forwards, Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term, options, and non-deliverable forwards.

FX volumes consolidate

December’s figure represents a minor drop of 0.8 percent month-over-month from ‎$398.0 billion in November 2019. It has also failed to outpace the trading turnover from the same month a year ago, marking a -0.3 percent fall year-over-year from $396 billion in December 2018.

In a month in which major currencies made a strong comeback against the dollar, bolstered by hopes of Sino-US initial trade deal, average volumes for spot trading improved to $78 billion in December. This figure is up four percent from $75 billion in the month prior. On a year-on-year basis, spot turnover for December registered a -13 percent drop from $90 billion a year ago.

Following a bumpy period in geopolitics throughout 2019, the recent jump in volumes has been comparatively modest in relation to the first half. Refinitiv’s figures reflect the trend observed in the monthly figures from many of the major trading platforms. However, given its position as a major trading hub for the wholesale market, the company provides one of the most comprehensive snapshots of activity.