CLS FX daily volumes continued above $2 trillion in February 2024

Rick Steves

The total average daily traded volumes reported an increase from 1.992 trillion in February 2023 to 2.026 trillion in February 2024.

MoneyBlackHole

CLS has reported a modest increase in average daily traded volumes in the FX market, reaching USD 2.03 trillion, an upturn of 1.8% YoY from February 2023.

Despite the overall growth, FX spot volumes saw a 5% decline. Contrasting this downturn, FX forward and FX swap volumes experienced increases of 31.1% and 1.2% respectively.

A $34 billion ADV increase in a year

The data on traded volumes by product for February 2023, January 2024, and February 2024 shows variations across different types of FX products. Forward volumes decreased from 0.138 trillion in February 2023 to 0.180 trillion in February 2024, while swap volumes remained relatively stable with a slight decrease from 1.370 trillion to 1.387 trillion in the same period. Spot trading, which faced a decline, dropped from 0.484 trillion to 0.459 trillion.

The total average daily traded volume submitted to CLS also reflects these changes, with an increase from 1.992 trillion in February 2023 to 2.026 trillion in February 2024.

The detailed numbers, while indicative of the FX market’s trading activities, come with a caveat. Due to rounding, they may not sum precisely to the totals provided, and percentages might not reflect the exact figures. Additionally, the inclusion of the EURHUF from February 2023 could affect the comparison with previously published figures.

Last month, CLS reported an increase in average daily traded volumes to USD 2.09 trillion in January 2024, marking a 9.2% rise from January 2023. The growth was reflected across all instruments, with FX forwards showing the most significant rise at 47.9%. FX spot and swap volumes also increased by 6.9% and 5.9%, respectively. Despite these changes, January’s FX spot volume remained steady at 0.498 trillion, unchanged from December 2023. The total average daily traded volume submitted to CLS in January 2024 reached 2.093 trillion, slightly up from 1.967 trillion in December 2023.

CLS onboarded big names into CLSNet and CCS services

CLS recently onboarded major financial institutions like BNY Mellon and ING to their CLSNet, a netting system for emerging currencies, which has seen considerable growth, with the average daily notional value of net calculations consistently exceeding $115 billion over the past year.

This growth in CLSNet participation reflects a strong industry support and a milestone was noted on December 20, 2023, when CLSNet recorded a daily notional high of $445 billion netted.

CLS also enrolled three settlement members, including Barclays and Danske Bank, into its Cross Currency Swaps (CCS) settlement service. The CCS service, an extension of CLS’s innovative Payment-versus-Payment (PvP) settlement service, CLSSettlement, offers a transformative solution for settling CCS transactions while reducing settlement risk and optimizing liquidity in the process. The CCS service is pivotal in redefining how cross-currency swaps are settled in the financial market. By leveraging CLS’s unique PvP settlement service, settlement members can securely process their CCS transactions, thus mitigating settlement risk.

Additionally, CCS flows are multilaterally netted against all other FX transactions within CLSSettlement. This process significantly reduces daily funding requirements for clients while simultaneously unlocking substantial liquidity optimization benefits across the industry.

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