Institutional foreign exchange (FX) volumes displayed mixed performance in August 2025, as the US dollar's renewed weakness following Federal Reserve (Fed) Chair Jerome Powell's Jackson Hole comments weighed on trading activity across major platforms.
The greenback's 2.2% decline in August marked a sharp reversal from July's 3.4% gain, bringing the DXY index back toward multi-year lows and reigniting concerns about the dollar's structural weakness that has dominated 2025 market dynamics. As a result, the average month-to-month decline in volume on major global institutional FX trading venues reached nearly 14%.
FX Volumes Weather Another Dollar Decline in August 2025
Cboe FX demonstrated resilience with total volumes reaching $960.1 billion in August, generating an average daily volume (ADV) of $45.7 billion across 21 trading days. This represented a modest decline from July's elevated levels but maintained relatively stable activity despite currency market turbulence.
And although volumes fell below the one trillion-dollar level for the first time since March 2025 during the last month of summer, it should be emphasized that August had fewer trading days than July (21 vs 23). As a result, ADV ultimately grew slightly compared to the previous month's level of $45.59 billion.
On the other hand, the Japanese Click 365 volumes continued their sharp decline, falling to 1.19 million contracts in August with ADV of 56,680 contracts. The platform posted a 16% month-on-month decline and a devastating 59% year-over-year drop, highlighting the persistent weakness in Japanese institutional FX appetite.
European Markets Show Relative Strength
360T, operated by Deutsche Börse Group, posted weaker results with total volumes of $685.6 billion and ADV of $32.6 billion. The platform experienced a month-on-month decline as European institutional appetite cooled amid broader dollar weakness and ongoing trade policy uncertainties.
Euronext FX volumes totaled $493.1 billion with ADV of $23.5 billion, demonstrating the platform's continued appeal to European institutional traders. While volumes declined from previous months, the performance remained relatively stable compared to other regional competitors.
European trading venues have benefited from the euro's 12% year-to-date gain against the dollar, creating attractive opportunities for currency arbitrage and hedging strategies that have sustained institutional interest throughout 2025's volatile environment. However, when compared to the results from the same period a year ago, the numbers look somewhat modest.
Dollar Volatility Shapes Market Dynamics
August's currency movements reflected the interplay between Federal Reserve policy signals and Trump administration trade initiatives. The dollar initially strengthened early in the month, touching 100.2 on August 1, before Powell's Jackson Hole speech triggered a selloff that pushed the index to 97.6 by August 22.
“Labor market weakness could soon outweigh concerns about inflation,” Powell noted at the symposium, leading traders to price in potential September rate cuts and triggering the dollar's mid-month decline.
The currency's subsequent rebound above 98.3 demonstrated the market's ongoing uncertainty about Federal Reserve independence and the sustainability of current monetary policy amid political pressures.
Outlook Remains Uncertain
With the DXY down approximately 10% year-to-date despite US economic resilience, institutional platforms are preparing for continued volatility as markets navigate Federal Reserve policy shifts and escalating trade tensions.
As September approaches, institutional volumes will likely depend on the Federal Reserve's policy decisions and the market's assessment of whether the dollar's recent weakness represents a temporary correction or the continuation of a broader structural decline that has defined much of 2025.
