CLS Group spot FX volume drops 20pct in December 2021

abdelaziz Fathi

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in December.

CLS Group

In particular, the average daily traded volume submitted to CLS was $1.64 trillion last month, down -9 percent month-over-month from $1.81 trillion in November 2021. Across a yearly timetable, the figure also reflected a drop of -7 percent relative to December 2020’s figures.

Following a period of wide-scale volatility and increased trading activity during the initial phase of the COVID-19 pandemic, average daily traded volumes in CLSSettlement, a payment-versus-payment settlement service, have now stabilized at lower volumes as compared to the first half.

CLS reported swaps volumes at $1.17 trillion in December 2021, down from $1.24 trillion in November 2021. Further, the figure was lower by a factor of -7 percent year-over-year from $1.26 trillion a year ago.

In terms of CLS’ spot FX volume, the group has reported the figure at $374 billion in December 2021, down 20 percent from $467 billion in November. Additionally, the figure was lower -9 percent over a yearly basis from the $410 billion set in the previous year.

Although monthly comparisons are always vulnerable to short-term fluctuations, there was a longer-term trend of declining spot volumes. However, the curve of this decline seems to have flattened in recent months.

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The weak performance was again pronounced across CLS forwards business, which yielded a figure of $95 billion last month. That was down 4 percent over a monthly basis from $99 billion in November, but was up by 6 percent year-over-year from $90 billion in December 2020.

CLS figures reflect the trend observed in the monthly figures from major trading platforms, which have seen record-breaking volumes in the first half before turning to suffer lackluster activity. But after several flat months, the latest metrics from major institutional spot FX platforms show the FX market has bounced back with slight jumps in daily trading volumes.

“In December 2021, we saw average daily traded volumes of USD1.64 trillion, a decrease of 7% compared to December 2020. Over the same period, FX spot and swap volumes decreased 9% and 7%, respectively, while FX forward volumes were up 6%,” said CLS’s Global Head of Product, Keith Tippell.

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